Question 1

Technological innovation and education, as economic tools of government, are too slow to have an impact on the dynamic factors of inflation or unemployment.

Accepted Answer

Technological innovation and education are long-term investments that can have a significant impact on the economy over time. They may not have an immediate impact on inflation or unemployment, but they can contribute to long-term economic growth and stability.

Question 2

Corruption is especially hard to fight in transitional political systems where norms of behavior are in flux.

Accepted Answer

Transitional political systems often lack strong anti-corruption institutions and the norms of behavior are still being established, making it easier for corruption to take root and harder to fight.

Question 3

The purpose of rents in a political system is to permit authorities to buy support.

Accepted Answer

Rents, or benefits given by the authorities, can be used to gain the support or loyalty of individuals or groups within a political system. This is a common strategy used by those in power to maintain their position and influence over decision-making.

Question 4

Your text argues that corruption has no direct economic costs but has many psychological costs including cynicism, lack of faith, and disregard for the rule of law.

Accepted Answer

The text argues that corruption does have direct economic costs in addition to the psychological costs mentioned.

Question 5

The dilemma of policy-making by government as it engages in the distribution of goods or services is to ultimately conclude that INEQUALITY is the option that creates the greater good in society.

Accepted Answer

The answer of The dilemma of policy-making by government as...

Question 6

Based on the data in your text, significant income inequalities are rather common in the selected sample societies and a surprisingly broad global pattern of income inequalities appears to exist regardless of type of political system.

Accepted Answer

The text states that significant income inequalities are common in the selected sample societies and that a broad global pattern of income inequalities exists regardless of political system, supporting the statement that income inequalities are rather common and a broad pattern exists regardless of political system.

Question 7

The conventional wisdom is that a central bank should be created by the state as a public agency with vast autonomy because, to be effective, it must make unpopular and politically volatile decisions.

Accepted Answer

The statement accurately reflects the conventional wisdom on the creation of a central bank.

Question 8

So-called "rational choice models" in political science assume that individuals will take their cues from government about what is the way for each to get as much from the state as possible.

Accepted Answer

Rational choice models in political science generally assume that individuals act in their own self-interest, making decisions based on maximizing their personal utility, rather than taking cues from the government on how to maximize benefits from the state.

Question 9

Import-substitution industrialization plans by governments often fail when large multilateral corporations target the country with massive shipments that flood the domestic market and drive local industries out of business.

Accepted Answer

The answer of Import-substitution industrialization plans by governments often fail...

Question 10

Daily more than one trillion dollars move around the world.

Accepted Answer

According to the Bank for International Settlements, the global foreign exchange market averages over $5 trillion in daily trading volume.

Question 11

Given global changes, the range of things the state has the capacity to control has shrunk, and the maneuvering room for unilateral action has also been narrowing.

Accepted Answer

The statement is true as globalization and technological advancements have led to the interconnectedness of nations and reduced the ability of states to act independently without considering their impact on other states. The state's capacity to control all aspects of society has thus reduced, requiring more multilateral cooperation and negotiation.

Question 12

One arguably effective way to combat unemployment is to create jobs through large-scale government projects.

Accepted Answer

Large-scale government projects, such as infrastructure development or renewable energy projects, can create jobs and stimulate economic growth. This has been done successfully in the past, such as with the New Deal programs during the Great Depression. However, some may argue that the effectiveness of this approach depends on the specific project and its implementation.

Question 13

Classic economic logic suggests that inflation and unemployment can BOTH be addressed effectively at the same time if government policies are wise and aggressive in their application.

Accepted Answer

According to the Phillips Curve, there is a trade-off between inflation and unemployment, suggesting that policies aimed at reducing inflation typically increase unemployment and vice versa, making it challenging to address both simultaneously with traditional economic tools.

Question 14

Some governments, like that in the South Korean example, are fortunate not to deal much with rent-seeking.

Accepted Answer

The given statement says that the South Korean government is fortunate not to deal much with rent-seeking. So, the answer is true.

Question 15

Groups and others in society often cast themselves in the role of rent-seekers.

Accepted Answer

It is true that groups and others in society often cast themselves in the role of rent-seekers, seeking special benefits or privileges from the government or other sources without truly creating value or contributing to society. This can lead to inefficiencies and distortions in the economy.

Question 16

Ordnungspolitik means unregulated by politics.

Accepted Answer

Ordnungspolitik actually refers to the framework of rules and regulations set by the government to ensure competition, market efficiency, and fair trade practices. Therefore, it is regulated by politics.

Question 17

What are some of the explanations for the tremendous variation between countries in terms of how well they provide prosperity for society and economic growth for their citizens?

Accepted Answer

The answer of What are some of the explanations for...

Question 18

One big reason that countries vary in their record of growth is that some governments make big mistakes in managing or investing in their economies.

Accepted Answer

Governments have a significant impact on their country's economic growth through their policies and investment decisions. Poor management or investing can lead to stagnant or declining economies, while effective management can lead to sustained growth.

Question 19

The German example of political economy is one in which the post-World War II German government has been created around the notion that government should be as little engaged in the economy as possible. Maximum latitude is invested in each corporate entity with only the lightest touch by government.

Accepted Answer

The German example of political economy, known as the Social Market Economy, involves strong government involvement in regulating markets and promoting social welfare, while also promoting competition and free enterprise. This model has been influential in the development of the European Union and is characterized by a balance between market forces and government intervention.

Question 20

Germany and Japan both have higher manufacturing labor costs than does the USA.

Accepted Answer

According to data from the Bureau of Labor Statistics, as of 2019 the average manufacturing hourly wage in the USA was $22.75, while in Japan it was $17.94 and in Germany it was $26.77. This means that both Japan and Germany have higher manufacturing labor costs than the USA.

Quiz 5: Economic Policy of the State