PPOG 502 Final Exam

PPOG 502 Final Exam Liberty University

Set 1

  1. The economic principle that incentives matter is best seen in which of the following statements?
  2. Economists refer to lobbying for wealth transfers and other political favor-seeking activities as
  3. The national debt is
  4. Gwartney et point out that investment rates in eastern European economies and the Soviet Union were very high for several decades prior to the collapse of Communism. Despite this investment, these economies did not enjoy rising living standards because
  5. Looking back at thousands of years of history, Sowell sees a great advantage for commerce and therefore economic growth in all of the following except:
  6. Setting maximum prices tends to:
  7. When Gwartney et says that citizens can “vote with their feet,” they mean that
  8. Which of the following is true about government spending programs intended to stimulate the economy?
  9. Thomas Sowell points out that in 1991, China and India had similar levels of output per person. But ten years later, China’s output per person was nearly twice that of According to Sowell, this was the result of
  10. When the Reagan administration abolished the last of the price controls on oil,
  11. Mises said, “when the government interferes with the market, it is more and more driven towards .”
  12. Wage and price controls imposed by President Nixon in 1971 caused
  13. Major reductions in income tax rates in the US, in the 1920s, the mid-1960s, and the 1980s, were immediately followed by
  14. Contrasting Japan, Germany, Switzerland, and Sweden with Spain, Sowell points out that:
  15. Mises said, “when the government interferes with the market, it is more and more driven towards .”
  16. Mises advocated
  17. When governments impose price floors, such as a minimum price for milk,
  18. The primary function of market prices is
  19. Since 1960, the S. federal government has
  20. Gwartney et al. say that if “private owners fail to maintain their property or if they allow it to be abused or damaged, they will bear the consequences in the form of a decline in the property’s ” This implies that
  21. According to Gwartney et , various “doomsday” forecasts predicting resource exhaustion have tended to be wrong because
  22. Mises, in the assigned reading, says that the only legitimate function is:
  23. All of the following would be examples of public goods except:
  24. “Protecting jobs” by imposing tariffs on imported goods is likely to
  25. Gwartney et say that there is little incentive for voters to be well-informed about candidates or political issues. Economists refer to this problem as
  26. Gwartney et suggests, toward the end of the assigned reading, that if the price level increases by more than four percent annually for two consecutive years,
  27. If the equilibrium price of gasoline is $4 and the price at this moment is $3, then the result will be
  28. The bribery, kickbacks, favoritism, and other corruption caused by involvement of the government in the market leads to a system referred to by Gwartney et as:
  29. According to Sowell, which of the following would not be a contributor to economic growth?
  30. Adam Smith said that the individual “intends only his own gain, and he is… led by an invisible hand to promote an end which was not part of his intention.” By this, Smith meant that
  31. Followers of English economist John Maynard Keynes argued that:
  32. Mises says in the assigned reading that, while private businesses cannot operate at a continuing loss, governments can do so because:
  33. Mises mentions the Roman emperor Diocletian who mixed more and more inexpensive copper into the silver The result of this practice was:
  34. A budget deficit occurs when
  35. Suppose a city tries to address the rising cost of housing by imposing rent Will this make housing more readily available? Explain.
  36. In what sense do market prices act like an “invisible hand”?
  37. Thomas Sowell points out in the assigned reading that the extent to which governments facilitate and record property rights (e.g., on housing) has an impact on economic growth What, exactly, is Sowell’s reasoning here?

Set 2

  1. According to Gwartney et al., when the government spends money on a project, such as a high-speed train linking San Diego and San Francisco, the result will likely be
  2. Mises said, “when the government interferes with the market, it is more and more driven towards
  3. “Protecting jobs” by imposing tariffs on imported goods is likely to
  4. The primary function of market prices is
  5. A budget deficit occurs when
  6. According to Sowell, which of the following is the most significant reason that developing countries have lingered in poverty?
  7. The national debt is
  8. The bribery, kickbacks, favoritism, and other corruption caused by involvement of the government in the market leads to a system referred to by Gwartney et al. as:
  9. Mises says in the assigned reading that, while private businesses cannot operate at a continuing loss, governments can do so because:
  10. As an example of the failure to “think past stage one,” Thomas Sowell pointed out that after the passage of the Americans with Disabilities Act in 1992,
  11. According to Gwartney et al., politicians who are motivated by their inner sense of what is right and who reject the appeals of special interest groups are
  12. Thomas Sowell argues in the assigned reading that there is a tendency for politicians to
  13. Mises mentions the Roman emperor Diocletian who mixed more and more inexpensive copper into the silver coinage. The result of this practice was:
  14. Gwartney et al. point out that investment rates in eastern European economies and the Soviet Union were very high for several decades prior to the collapse of Communism. Despite this investment, these economies did not enjoy rising living standards because
  15. According to Sowell, poor countries can best increase their economic growth rates by welcoming
  16. Among the effects of rent control policies are:
  17. According to Gwartney et al., various “doomsday” forecasts predicting resource exhaustion have tended to be wrong because
  18. Setting maximum prices tends to:
  19. When goods are taxed, some otherwise advantageous voluntary exchanges do not occur. The lost value of these exchanges is referred to as
  20. Gwartney et al. says that “just one indicator, __________________, spontaneously carries so much information that it guides buyers and sellers to make decisions that help both obtain what they want.
  21. When Gwartney et al. says that citizens can “vote with their feet,” they mean that
  22. According to Mises, efforts to control prices during the French Revolution
  23. Since 1960, the U.S. federal government has
  24. Mises said, “when the government interferes with the market, it is more and more driven towards
  25. Mises argued in the assigned reading that
  26. High income tax rates:
  27. Politicians sometimes trade votes to get the necessary support to pass the legislation they want. This is called
  28. Mises, in the assigned reading on inflation, notes that
  29. Which of the following is a consequence of competition in the marketplace?
  30. Wage and price controls imposed by President Nixon in 1971 caused
  31. Economists refer to lobbying for wealth transfers and other political favor-seeking activities as
  32. According to Gwartney et al., special interest groups will use the democratic political process to
  33. Public goods have two characteristics. They are:
  34. Major reductions in income tax rates in the US, in the 1920s, the mid-1960s, and the 1980s, were immediately followed by
  35. Suppose you read the following: “I believe that a man with a helmet defending his country should make more money than a man with a helmet defending a football.” Explain why professional football players tend to earn much more than professional soldiers.
  36. What is rational ignorance, and what impact does it have on government policymaking?
  37. Can government economic policies that are favored by a majority make us worse off? Explain (use numbers in your answer).
  38. Thomas Sowell points out in the assigned reading that the extent to which governments facilitate and record property rights has an impact on economic growth rates. Explain this briefly.
  39. What impact will restrictions on imports into the US have on exports from the US to other countries? Explain.
  40. Suppose a city tries to address the rising cost of housing by imposing rent controls. Will this make housing more readily available? Explain.
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