Monopolies may earn zero economic profit because of

Suppose there is a $200 billion increase in government spending. We know that this increase in government spending will cause which of the following to occur?

A) equilibrium real GDP will increase by exactly $200 billion. B) an increase in equilibrium real GDP and an increase in the multiplier. C) an increase in equilibrium real GDP and a reduction in the multiplier. D) an increase in equilibrium real GDP and no change in the multiplier.

Public choice analysis suggests that the primary motivating factor for politicians will be finding the policies that are most likely to

a. get them reelected. b. improve economic efficiency. c. improve the welfare of society as a whole. d. anger the interest groups that provide substantial contributions to their campaigns.