Question 1

Transfer payments are

Accepted Answer

Transfer payments are payments made by the government to individuals or groups without receiving any goods or services in return. These payments are meant to redistribute income from taxpayers to recipients who are in need for various reasons, such as unemployment, disability, or poverty. Examples of transfer payments include Social Security benefits, welfare payments, and unemployment insurance.

Question 2

Measured as a share of national income, government expenditures on income transfers during the last 70 years have

Accepted Answer

Government expenditures on income transfers have grown rapidly over the last 70 years. This includes programs such as Social Security, Medicare, and Medicaid, as well as welfare and other assistance programs.

Question 3

A special-interest issue is one that

Accepted Answer

A special interest issue benefits a small, well-organized interest group at the expense of taxpayers or consumers. This means that the group receiving the benefit is not paying for the full cost of the program or policy, and instead, the cost is being distributed among a larger group, often the general public.

Question 4

Which of the following provides the most reasonable explanation for why agricultural interests lobby for higher farm subsidies and price supports?

Accepted Answer

Agricultural interests lobby for higher farm subsidies and price supports in order to seek a redistribution of income favoring themselves. These policies benefit large agricultural businesses and landowners at the expense of taxpayers and consumers while doing little to help small family farmers.

Question 5

Combined federal, state, and local government expenditures in the United States were approximately 9 percent of the gross domestic product (GDP) in 1930. How large were government expenditures as a share of GDP in 2015?

Accepted Answer

According to the Bureau of Economic Analysis, government expenditures at all levels totaled 35.5 percent of GDP in 2015. Therefore, the closest answer choice is D, which is approximately 36 percent.

Question 6

Which of the following is an example of a transfer payment?

Accepted Answer

The answer of Which of the following is an example...

Question 7

An issue that generates substantial benefits to a small group of individuals while imposing a small cost on many others is called a

Accepted Answer

A special-interest issue is an issue that benefits a small group of individuals or organizations while imposing a small cost on many others. This can create a situation where the small group has a disproportionate amount of influence and can lobby for policies that benefit them at the expense of the broader public.

Question 8

Special-interest legislation is characterized by

Accepted Answer

Special-interest legislation is designed to benefit a particular group or interest, resulting in concentrated benefits for that group. However, the costs of the legislation are usually spread across the broader population, resulting in widespread costs.

Question 9

Which of the following is the most likely explanation for the imposition of a price floor in the market for corn?

Accepted Answer

The imposition of a price floor is typically requested by sellers of a product, as it ensures they can receive a minimum price for their goods. Policymakers may consider the impact on efficiency, but ultimately the decision to implement a price floor is driven by pressure from sellers.

Question 10

Restrictions that limit sugar imports, subsidies for the construction of sports stadiums, and federal spending on programs like the construction of an indoor rain forest in Iowa all provide examples of government programs

Accepted Answer

These government programs reflect the political attractiveness of special-interest issues. Restrictions on sugar imports may benefit domestic sugar producers, subsidies for sports stadiums may benefit team owners and construction companies, and federal spending on an indoor rainforest in Iowa may benefit local politicians and environmental groups. These programs may not necessarily prioritize the general welfare or be based on careful analysis of benefits relative to cost, but rather serve the interests of certain special interest groups.

Question 11

Direct income transfers account for approximately what percentage of total government spending?

Accepted Answer

The answer of Direct income transfers account for approximately what...

Question 12

Between 1930 and 1980, government expenditures as a percent of GDP in the United States

Accepted Answer

The answer of Between 1930 and 1980, government expenditures as...

Question 13

If a federal agency requested funds to build a dam on an Idaho river to irrigate nearby farmland used for growing potatoes, the most active support for the project probably would come from

Accepted Answer

The potato farmers who own the land to be irrigated would benefit directly from the project and therefore would be the most active supporters. The other options do not necessarily have a direct or immediate benefit from the project.

Question 14

In 2015, the combined expenditures of federal, state, and local governments in the United States were approximately 36 percent of gross domestic product (GDP). Approximately what percentage of GDP were government expenditures in 1930?

Accepted Answer

The answer of In 2015, the combined expenditures of federal,...

Question 15

In 2015, government income transfers redistributed what percentage of national income?

Accepted Answer

According to the question, in 2015 government income transfers redistributed a percentage of the national income. The option that provides the percentage is option C, which states that 17.3 percent of the national income was redistributed through income transfers. Therefore, C is the correct choice.

Question 16

Which of the following is true regarding government expenditures in the United States?

Accepted Answer

The answer of Which of the following is true regarding...

Question 17

Government action will often result in the counterproductive use of resources because

Accepted Answer

Politicians may prioritize enacting policies that will win over voters and secure their reelection, rather than selecting policies that are most productive or cost-effective. This can result in the misallocation of resources, as political incentives can lead to the favoring of certain groups or programs over others.

Question 18

Which of the following is accurate regarding government expenditures in the United States?

Accepted Answer

The federal government spends considerably more than state and local governments combined. This can be seen in the breakdown of the federal budget, which includes spending on areas such as defense, social security, and healthcare. Additionally, federal grants to state and local governments make up a significant portion of their budgets.

Question 19

When politicians support policies that benefit small interest groups, such as farmers, at the expense of unorganized, widely dispersed groups, for example, taxpayers or consumers, this is a reflection of the

Accepted Answer

The situation described is an example of the special-interest effect, where politicians cater to the needs of specific interest groups, rather than considering the overall welfare of society. This often leads to policies that benefit a few, but at the expense of the wider public.

Question 20

The major categories of federal government spending are

Accepted Answer

Health care, national defense, Social Security, and other income transfers are the major categories of federal government spending. These categories make up a large portion of the federal budget and are seen as essential to the functioning of government and the well-being of citizens. Law enforcement, environmental protection, public education, and highways are also important areas of government spending but are not among the major categories of federal spending.

Quiz 6: The Economics of Political Action