Imagine the economy is slipping into a recession. What would a Keynesian advocate and why? Compare this approach to using interest rates to affect the money supply
Answer:
An ideal response will:
1. Identify that Keynesian economic policy is a type of fiscal policy that is more concerned with high levels of unemployment than inflation.
2. Specify how increasing government spending and lowering tax rates encourages employment and investment. Note that when taxes are lowered, individuals and businesses will have more money to invest, which in turn increases the potential for new job creation and employment.
3. Note how this is different from using interest rates to affect the money supply because lowering interest rates reduces the cost of money and makes it more likely that banks will offer loans to businesses seeking to expand and thus increases the prospects for increased hiring and employment.
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What did a recent study of interest group activity reveal about the importance of financial resources in the interest group system?
a. The big interests always win. b. The correlation between big money and lobbying success is weak. c. PAC donations and lobbying expenditures were shown to have a great impact on policy outcomes. d. Wealthy interest groups tend to align themselves with other wealthy groups and successfully overpower interest groups with less money.
Which of the following allows citizens to draft, adopt, and amend their own municipal charters?
a. Home rule charters b. Optional charters c. General charters d. Classified charters