Public Choice Analysis Indicates That

question 291

Multiple Choice

Public choice analysis indicates that

• A) because government action provides public goods, it always increases the wealth of the citizenry.
• B) unconstrained democratic governments often enact special-interest programs that waste resources and impair the standard of living.
• C) constitutional rules limiting public-sector activity generally lower the economic efficiency of the overall economy.
• D) Politicians and voters are better able to judge the public interest than their own private interest.

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Definitions:

Short-run Phillips Curve

A graphical representation indicating an inverse relationship between the rate of inflation and the rate of unemployment in the short term.

Inflation

The measure of how quickly the general price level for products and services grows, resulting in reduced consumer purchasing ability.

Money Supply Growth Rate

The rate at which the amount of money available in an economy grows, influencing inflation and economic activity.

Natural Rate of Unemployment

The level of unemployment consistent with a stable rate of inflation, determined by the structure of the labor market.