A presidential candidate once famously said about a particular policy: "I voted for it before I voted against it." How might such a statement make sense in the context of sophisticated voting along agendas.
What will be an ideal response?
If a sophisticated voter looks down the "agenda tree", he may realize that an early vote for policy A is actually a vote for policy C given what will happen later on in the tree. Suppose he prefers A to B to C. He may therefore vote for B (and against A) early on in order to get the next vote to be a vote of C against B (where B can win) rather than A against C (where C would win). So he votes for C before voting against it.
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Liquidity refers to how:
A. easy an asset is to convert immediately to cash without losing value. B. quickly the same dollar changes hands in the economy. C. quickly the average household spends its disposable income. D. easy money converts to assets in an economy.
Looking at the globalized AS/AD model, the economy can exceed potential output, without generating accelerating goods inflation, because:
A. the domestic price level always exceeds the world price level. B. the world price level always exceeds the domestic price level. C. the world price level puts a cap on the domestic price level. D. the LRAS curve is no longer vertical.