Use the Figure Below to Answer the Following Question(s)

question 170

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 6-1
-Figure 6-1 illustrates the four possibilities of the distribution of costs and benefits among voters for a government project. Programs that give subsidies to a small group of producers at general taxpayer expense would be considered

• A) type A projects, and the government would be likely to undertake these projects if they were efficient and to reject them if they were inefficient.
• B) type B projects, and the government would be likely to undertake many of these projects even when they were counterproductive (inefficient).
• C) type C projects, and the government would be likely to fail to undertake many of these projects even when they were productive (efficient).
• D) type D projects, and the government would be likely to undertake these projects if they were efficient and to reject them if they were inefficient.

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Definitions:

Crude Quantity Theory

A simplified version of the quantity theory of money suggesting that an increase in money supply leads to a proportional increase in prices.

M

A symbol often representing money supply in economic discussions, including various measures like M1, M2, and M3.

Q

Quantity, frequently used in economic equations and discussions to denote the amount of goods produced or consumed.

PQ

The product of price (P) and quantity (Q), often used in economics to calculate total revenue or expenditure.