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100 Cards in this Set
- Front
- Back
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Describe a form of pseudo-capitalism based on political favors (like socialism) instead of consumer preferences.
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p. 124 crony capitalism
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What is the market value of all final goods and services produced within a country during a year?
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p. 131 gross domestic product
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What type of goods is purchased for resale or as parts for assembly?
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p. 131 intermediate goods
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What type of goods is purchased by the ultimate user or consumer?
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p. 131 final market goods
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What is the largest component of GDP?
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p. 135 personal consumption
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Describe private-sector expenditure on durable assets and inventory.
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p. 135 private investment
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What is the amount of physical capital worn out during production?
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p. 136 depreciation
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What goods and services are produced domestically but sold abroad?
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p. 136 exports
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What goods and services are produced abroad but purchased domestically?
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p. 136 imports
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Taxes that companies pay but pass along to consumers in the form of higher prices are known by what name?
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p. 137 indirect business taxes
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What is the term for the sum of earnings from employment, self-employment, rent, interest, and corporate profit in a country during a year?
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137 national income
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What is the term for GDP minus the net income of foreigners?
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p. 137 gross national product
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What are values expressed in current dollars?
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p. 139 nominal values
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What are values adjusted for inflation?
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p. 139 real values
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What price index is broader than the CPI or consumer price index?
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p. 139 GDP deflator
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What term describes a decrease in the purchasing power of the dollar?
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p. 140 inflation
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What term refers to unreported transactions including barter and cash that may or may not be illegal?
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p. 144 underground economy
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Together, the booms and busts in the economy are known as what?
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A “surprise question” THE BUSINESS CYCLE
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What term means a contraction in the economy?
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p. 154 recession
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What term means a prolonged and sharp decline in the economy?
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p. 154 depression
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The civilian labor force excludes discouraged workers, retirees, prisoners, military personnel, homemakers, students, and all people under what age?
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p. 156 sixteen
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The civilian labor force includes those who are unemployed as well as those who are employed (true or false).
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p. 156 true
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The term unemployed includes those who are not looking for work (true or false).
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p. 156 false
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The following people are counted as unemployed: housewives, students, retirees, the sick, and the disabled (true or false).
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p. 156 false
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What type of unemployment results from imperfect information?
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p. 160 frictional
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What type of unemployment results from a lack of skill?
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p. 161 structural
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What type of unemployment results from a recession?
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p. 162 cyclical
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The term full employment means zero unemployment (true or false).
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p. 163 false
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What type of government policy is characterized by taxes and spending? |
Liberal |
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What type of government policy is determined by the Federal Reserve? |
Monetary Policy |
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What is the price of foreign currency in terms of domestic currency?
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p. 175 exchange rate
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What is the direction of the aggregate demand curve in terms of price and quantity?
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p. 176 downward
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What is the direction of the short-run aggregate supply curve in terms of price and quantity?
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p. 179 upward
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What characterizes the intersection of the aggregate demand curve and the short-run aggregate supply curve?
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p. 180 equilibrium
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What economic index measures the optimism of the public?
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p. 198 consumer sentiment index
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What is defined as the average output per worker during a specific period?
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p. 200 productivity
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An unexpected spike in the price of oil is an example of what?
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p. 201 supply shock
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What will happen to the short-run aggregate supply curve as the result of an adverse supply shock?
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p. 209 shift
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What concept implies that an increase in spending on a project will generate income for suppliers and others ad infinitum?
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p. 218 multiplier principle
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What results when annual government expenditure exceeds government revenue?
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p. 220 budget deficit
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A change in government policy that alters government revenue or expenditure is known as what?
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p. 221 discretionary fiscal policy
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The type of government policy that results in bigger budget deficits is called what?
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p. 221 expansionary fiscal policy
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The type of government policy that moves in a direction opposite to the business cycle is known as what?
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p. 224 countercyclical policy
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Programs such as unemployment insurance and progressive income tax that operate in a countercyclical fashion are called what?
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p. 224 automatic stabilizers
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Increasing interest rates that result from government borrowing to cover budget deficits has what effect on private borrowing?
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p. 230 crowding-out effect
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What group of economists disapproves of deficit spending in a recession?
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p. 233 classical or new classical
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What group of economists approves of deficit spending in a recession?
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p. 233 Keynesian
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The concept that budget deficits result in lower taxes now but higher taxes later is known as what?
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p. 233 Ricardian equivalence
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Which “side” of economists favors more government spending to stimulate consumer spending? |
Democrats/Liberals |
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Which “side” of economists favors lower taxes to stimulate the production of goods and services? |
Republicans/Conservatives |
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What word describes the fundamental concept of economics?
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p. 4 scarcity
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What word describes human-made resources such as buildings and equipment?
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p. 4 capital
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What is the opposite of subjective, opinion based on preference?
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p. 6 objective
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In a market economy, price performs what function?
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p. 6 rationing
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What is the highest valued alternative that must be sacrificed when choosing an option?
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p. 7 opportunity cost
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What is the subjective benefit expected from making a choice?
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p. 8 utility
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What word describes the cost of producing an additional unit of product?
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p. 9 marginal
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What is the opposite of normative economics?
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p. 13 positive economics
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What is the Latin term meaning: other things being constant?
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p. 13 ceteris paribus
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What is the opposite of the fallacy of division?
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p. 15 fallacy of composition
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What branch of economics focuses on households and firms? |
Micreconomics |
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What branch of economics focuses on markets and nations? |
Macroeconomics |
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What term describes the time and money spent to complete an exchange?
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p. 22 transaction cost
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Trade or exchange is essentially based on what legal concept?
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p. 23 property rights
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What type of person introduces new products or improved techniques to lower cost?
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p. 31 entrepreneur
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What is the name of the process that replaces old products with new ones?
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p. 31 creative destruction
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What process breaks down production into specific tasks?
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p. 33 division of labor
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What is the win-win game that relies on specialization and exchange?
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p. 33 comparative advantage
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What economic system depends on individual or private ownership
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p. 36 capitalism
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What economic system depends on public or government ownership?
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p. 36 socialism
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What economic law describes the inverse or negative relationship between price and quantity?
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Law of Demand
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What type of product serves a similar purpose?
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p. 44 substitute
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What type of product is typically consumed with another?
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p. 50 compliment
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What term describes the excess of sales revenue relative to the opportunity cost of production?
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p. 52 profit
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What economic law describes the direct or positive relationship between price and quantity? |
Law of Supply |
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What concept describes the interaction of buyers and sellers in the process of trade or exchange?
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p. 57 market
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What type of market involves inputs to produce goods and services?
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p. 69 resource market
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A legally established maximum price such as rent control is more generally called what?
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p. 71 price ceiling
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A legally established minimum price such as minimum wage is more generally called what?
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p. 74 price floor
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What type of market operates outside the legal system?
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p. 78 black market
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What term describes the burden to buyers and/or sellers when a tax is imposed?
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p. 80 deadweight loss
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The statutory burden or incidence of taxation may be viewed in what other way?
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p. 78 actual
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What terms describes a tax rate that rises with income?
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p. 83 progressive
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What term describes a tax rate that remains the same regardless of income?
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p. 83 proportional
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What term describes a tax rate that falls with income?
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p. 83 regressive
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What curve illustrates the relationship between tax rate and tax revenue?
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p. 85 Laffer curve
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What term describes a government payment to either a buyer or seller usually on a per-unit basis?
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p. 87 subsidy
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A spillover such as pollution that adversely affects a third party is called what?
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p. 98 negative externality or external cost
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A spillover such as education that beneficially affects a third party is called what?
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p. 98 positive externality or external benefit
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Describe the type of goods distinguished by non-rivalry and non-excludability?
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p. 102 public goods
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What type of person receives a benefit without paying for it?
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p. 102 free rider
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What type of business operates with a right or license to market another company’s goods or services?
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p. 104 franchise
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One broad type of economic failure is market failure. What is the other?
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p. 106 government failure
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What now constitutes almost half the total expenditure of the government?
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p. 111 transfer payments
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What type of government expenditure has grown from one percent of national income in 1930 to eighteen percent in 2010?
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p. 111 transfer payments
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What type of analysis applies the principles and methodologies of economics to politics? |
Applied Economics |
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What effect is caused by the fact that a single vote can seldom if ever determine the outcome of an election?
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p. 114 rational ignorance
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What is the term for quid quo pro support between legislators?
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p. 120 logrolling
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Describe the bundling of unrelated government spending in a single bill?
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p. 120 pork-barrel legislation
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Describe those who exploit the political process to take the wealth of others.
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p. 123 rent seekers
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