How Does Democracy Affect the Likelihood That Necessary Public Goods

question 74

Multiple Choice

How does democracy affect the likelihood that necessary public goods will be provided?

• A)More representative institutions are likely to give more weight to public concerns about overall economic growth.
• B)Having elections makes democratic governments more susceptible to the influence of special interest groups who resist economic reforms.
• C)Since citizens oppose tax increases,democracies are often unable to raise the revenue necessary for providing public goods.
• D)Citizens in democracies are more likely to organize and provide public goods themselves.

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Definitions:

Natural Rate

The rate of a quantity, such as unemployment or interest, that prevails when the economy is in a long-term equilibrium.

Classical Dichotomy

The theoretical separation of nominal and real variables in classical economics, suggesting that changes in the money supply only affect nominal variables.

Inflation Rate

An upward movement in the overall price level of goods and services in an economy over time.

Aggregate Demand

Aggregate request for products and services in an economy, measured at a particular general price level throughout a defined time interval.