Economics for Public Administrators Practice Exam Quiz
Sample Questions
Q1. What is the primary goal of economic systems in allocating resources?
A) Equity
B) Efficiency
C) Redistribution
D) Profit Maximization
Answer: B) Efficiency
Q2. Which of the following is an example of a market failure in allocation?
A) Perfect competition
B) Monopolies
C) Efficient pricing
D) Private ownership
Answer: B) Monopolies
Q3. The principle of scarcity implies that:
A) Resources are infinite.
B) Economic choices involve trade-offs.
C) All needs and wants can be satisfied.
D) Markets always function optimally.
Answer: B) Economic choices involve trade-offs.
Q4. Income inequality is measured using the:
A) Gini coefficient.
B) Phillips curve.
C) Lorenz factor.
D) Keynesian model.
Answer: A) Gini coefficient.
Q5. Progressive taxation is designed to:
A) Increase income inequality.
B) Decrease income inequality.
C) Encourage wealth accumulation.
D) Eliminate unemployment.
Answer: B) Decrease income inequality.
Q6. Which of the following policies helps reduce poverty?
A) Regressive taxes
B) Subsidies for luxury goods
C) Minimum wage laws
D) Eliminating public education
Answer: C) Minimum wage laws
Q7. An externality occurs when:
A) All benefits and costs are internalized by the market.
B) Third parties are affected by an economic activity.
C) Only private goods are traded.
D) Prices reflect all social costs.
Answer: B) Third parties are affected by an economic activity.
Q8. A positive externality is best exemplified by:
A) Pollution from a factory.
B) Vaccination programs.
C) Traffic congestion.
D) Overfishing in common waters.
Answer: B) Vaccination programs.
Q9. Governments typically address negative externalities through:
A) Tax incentives.
B) Subsidies.
C) Regulation and taxation.
D) Market competition.
Answer: C) Regulation and taxation.
Q10. Which of the following is a key characteristic of public goods?
A) Rivalry in consumption
B) Excludability
C) Non-excludability
D) High marginal cost
Answer: C) Non-excludability
Q11. An example of a pure public good is:
A) Electricity
B) National defense
C) Food distribution
D) Health insurance
Answer: B) National defense
Q12. The “free-rider problem” is associated with:
A) Private goods
B) Club goods
C) Public goods
D) Common-pool resources
Answer: C) Public goods
Q13. Public choice theory examines:
A) Individual preferences in the private market.
B) Decision-making in public sector entities.
C) Corporate tax evasion.
D) Market-based pricing models.
Answer: B) Decision-making in public sector entities.
Q14. The concept of “rational ignorance” implies that:
A) Voters remain uninformed because the cost outweighs the benefit.
B) Politicians always seek to maximize public welfare.
C) Markets fail due to imperfect information.
D) Public officials lack decision-making ability.
Answer: A) Voters remain uninformed because the cost outweighs the benefit.
Q15. Rent-seeking behavior refers to:
A) Allocating scarce resources efficiently.
B) Lobbying for economic advantages through government intervention.
C) Promoting free-market principles.
D) Eliminating corruption in public administration.
Answer: B) Lobbying for economic advantages through government intervention.
Q16. Fiscal policy involves changes in:
A) Interest rates and money supply.
B) Government spending and taxation.
C) Trade balances and currency exchange rates.
D) Inflation and unemployment.
Answer: B) Government spending and taxation.
Q17. Monetary policy is primarily implemented by:
A) The legislative branch.
B) Central banks.
C) Local governments.
D) Public administrators.
Answer: B) Central banks.
Q18. A recession is typically characterized by:
A) High inflation and low unemployment.
B) Declining GDP and rising unemployment.
C) Increasing GDP and decreasing government debt.
D) Balanced budgets and trade surpluses.
Answer: B) Declining GDP and rising unemployment.
Q19. Which of the following policies can help stimulate economic growth during a recession?
A) Increasing taxes
B) Cutting government spending
C) Reducing interest rates
D) Reducing exports
Answer: C) Reducing interest rates
Q20. Crowding out occurs when:
A) Private investment decreases due to increased government borrowing.
B) Government spending completely replaces private sector activity.
C) Public goods are overproduced.
D) Inflation leads to reduced purchasing power.
Answer: A) Private investment decreases due to increased government borrowing.
Q21. Public budgets are typically constrained by:
A) Unlimited resources.
B) The need for profit maximization.
C) Competing demands for limited resources.
D) Lack of public accountability.
Answer: C) Competing demands for limited resources.
Q22. The primary goal of public budgeting is to:
A) Ensure private sector growth.
B) Maximize government debt.
C) Provide equitable allocation of resources.
D) Increase tax revenue.
Answer: C) Provide equitable allocation of resources.
Q23. A balanced budget requires:
A) Expenses to exceed revenues.
B) Revenues to match expenses.
C) No government debt.
D) Equal spending across all sectors.
Answer: B) Revenues to match expenses.
Q24. Which macroeconomic event can significantly reduce the service levels of public entities?
A) Economic expansion
B) Budget surpluses
C) Recessions
D) Stable inflation
Answer: C) Recessions
Q25. Public administrators often face challenges in managing budgets due to:
A) Predictable economic conditions.
B) Fixed resource availability.
C) Changing political priorities.
D) Overfunding of services.
Answer: C) Changing political priorities.
Q26. Which principle is key to understanding public finance?
A) The invisible hand
B) Equity in resource allocation
C) Profit maximization
D) Consumer sovereignty
Answer: B) Equity in resource allocation
Q27. External shocks, such as natural disasters, can:
A) Have no impact on public budgets.
B) Require reallocating resources to emergency services.
C) Always lead to increased public savings.
D) Reduce the importance of fiscal policy.
Answer: B) Require reallocating resources to emergency services.
Q28. Deficit financing is often criticized because it can:
A) Boost economic growth.
B) Reduce public debt.
C) Lead to higher future taxes.
D) Stabilize inflation.
Answer: C) Lead to higher future taxes.
Q29. In economic terms, public administrators should prioritize policies that:
A) Favor short-term political gains.
B) Maximize societal welfare.
C) Eliminate all market activities.
D) Favor one group over another.
Answer: B) Maximize societal welfare.
Q30. One challenge in implementing public goods is:
A) Determining appropriate market prices.
B) Avoiding overproduction by the private sector.
C) Addressing non-excludability and free-riding.
D) Maximizing profits.
Answer: C) Addressing non-excludability and free-riding.
Q31. The concept of opportunity cost is best described as:
A) The monetary cost of producing a good or service.
B) The cost of choosing one alternative over another.
C) The profit made from selling goods or services.
D) The additional cost of producing one more unit.
Answer: B) The cost of choosing one alternative over another.
Q32. Which economic system relies primarily on government decision-making to allocate resources?
A) Market economy
B) Command economy
C) Mixed economy
D) Traditional economy
Answer: B) Command economy
Q33. In a perfectly competitive market, the allocation of resources is:
A) Inefficient due to lack of central planning.
B) Determined by supply and demand.
C) Influenced by government subsidies.
D) Based on monopolistic power.
Answer: B) Determined by supply and demand.
Income Distribution
Q34. Which of the following redistributive policies directly impacts income inequality?
A) Universal basic income programs
B) Reducing environmental regulations
C) Subsidizing fossil fuel production
D) Increasing military spending
Answer: A) Universal basic income programs
Q35. The Lorenz curve is used to measure:
A) The efficiency of government programs.
B) The distribution of income or wealth.
C) The balance of trade in an economy.
D) The level of public goods consumption.
Answer: B) The distribution of income or wealth.
Q36. Social welfare programs aim to:
A) Enhance income inequality.
B) Reduce the tax base.
C) Provide support for low-income populations.
D) Increase market competition.
Answer: C) Provide support for low-income populations.
Externalities
Q37. Which of the following is a potential solution for addressing negative externalities?
A) Issuing tradable pollution permits
B) Eliminating all public goods
C) Encouraging private monopolies
D) Allowing unlimited free-market activities
Answer: A) Issuing tradable pollution permits
Q38. The Coase theorem suggests that externalities can be resolved:
A) Only through government intervention.
B) With clearly defined property rights.
C) By increasing market competition.
D) Without any private negotiations.
Answer: B) With clearly defined property rights.
Q39. A subsidy to encourage positive externalities would likely target which of the following industries?
A) Tobacco production
B) Renewable energy
C) Luxury goods
D) Oil exploration
Answer: B) Renewable energy
Public Goods
Q40. Which of the following is NOT a public good?
A) Clean air
B) National parks
C) Toll roads
D) Street lighting
Answer: C) Toll roads
Q41. Public goods are underproduced in free markets because:
A) They are too expensive to produce.
B) Their benefits cannot be easily confined to paying consumers.
C) Government intervention is too high.
D) Private markets have perfect information.
Answer: B) Their benefits cannot be easily confined to paying consumers.
Q42. Common-pool resources differ from public goods because they:
A) Are excludable but non-rival.
B) Are rival but non-excludable.
C) Are neither rival nor excludable.
D) Are privately owned.
Answer: B) Are rival but non-excludable.
Public Choice Theory
Q43. According to public choice theory, bureaucracies often:
A) Aim to minimize costs.
B) Act in their self-interest to maximize budgets.
C) Efficiently allocate resources.
D) Promote market-based decision-making.
Answer: B) Act in their self-interest to maximize budgets.
Q44. In public choice theory, the term “logrolling” refers to:
A) Efficient budget allocation.
B) Trading of votes among legislators.
C) Reducing corruption in public policy.
D) Balancing government budgets.
Answer: B) Trading of votes among legislators.
Q45. Median voter theory assumes that:
A) Public policies cater to the least-informed voters.
B) Policies are determined by the preferences of the median voter.
C) Economic efficiency is always achieved.
D) Politicians prioritize ideological consistency over votes.
Answer: B) Policies are determined by the preferences of the median voter.
Macroeconomic Events and Policies
Q46. Inflation affects public budgets by:
A) Increasing the real value of government debt.
B) Reducing the nominal cost of public services.
C) Increasing the nominal cost of goods and services.
D) Eliminating the need for fiscal policy adjustments.
Answer: C) Increasing the nominal cost of goods and services.
Q47. Which of the following policies is contractionary fiscal policy?
A) Decreasing taxes
B) Increasing government spending
C) Raising interest rates
D) Increasing taxes
Answer: D) Increasing taxes
Q48. Automatic stabilizers in an economy include:
A) Government spending on defense.
B) Unemployment insurance and progressive taxes.
C) Interest rate changes by the central bank.
D) Public goods like national defense.
Answer: B) Unemployment insurance and progressive taxes.
Public Entity Budgets and Service Levels
Q49. When public entities face budget deficits, they often:
A) Increase spending on all programs.
B) Reduce non-essential services.
C) Eliminate funding for infrastructure.
D) Ignore fiscal constraints.
Answer: B) Reduce non-essential services.
Q50. Tax increment financing (TIF) is a tool used by public administrators to:
A) Fund immediate operational expenses.
B) Finance infrastructure projects with future tax revenue.
C) Reduce the overall tax rate.
D) Avoid public-private partnerships.
Answer: B) Finance infrastructure projects with future tax revenue.
Q51. The elasticity of demand for public services influences:
A) The allocation of public goods.
B) Taxation strategies and funding levels.
C) Private sector competition.
D) The production of private goods.
Answer: B) Taxation strategies and funding levels.
Q52. Which of the following budget types ensures no deficit or surplus at the end of a fiscal year?
A) Capital budget
B) Operating budget
C) Balanced budget
D) Zero-based budget
Answer: C) Balanced budget
Set 2
Which of the following is a typical private good?
a) Public park
b) Toll-collected highway system
c) Public administration
d) Urban clean water
The law of demand states that, all else being equal, as the price of a good increases, the quantity demanded:
a) Increases
b) Decreases
c) Remains constant
d) Fluctuates unpredictably
Which of the following is an example of a public good?
a) A sandwich
b) National defense
c) A private swimming pool
d) A concert ticket
The concept of ‘market failure’ refers to:
a) A situation where the market operates efficiently
b) A situation where the market fails to allocate resources efficiently
c) A situation where the government intervenes in the market
d) A situation where all goods are public goods
Which of the following is a characteristic of a public good?
a) Excludability
b) Rivalry
c) Non-excludability
d) Private ownership
The term ‘opportunity cost’ refers to:
a) The cost of producing one more unit of a good
b) The cost of the next best alternative foregone
c) The total cost of production
d) The cost of labor
Which of the following is an example of a merit good?
a) Cigarettes
b) Alcohol
c) Education
d) Gambling
The ‘invisible hand’ concept, introduced by Adam Smith, suggests that:
a) Government intervention is necessary for market efficiency
b) Markets are inherently inefficient
c) Individuals pursuing their own self-interest can lead to positive social outcomes
d) All economic decisions should be made by the government
Which of the following is a tool of fiscal policy?
a) Setting interest rates
b) Taxation
c) Printing money
d) Regulating trade
The concept of ‘public choice theory’ examines:
a) How public goods are provided
b) The behavior of public officials and voters using economic principles
c) The allocation of resources in a market economy
d) The role of government in economic development
Which of the following is an example of a demerit good?
a) Public parks
b) Vaccinations
c) Cigarettes
d) Public libraries
The ‘free rider problem’ occurs when:
a) Individuals consume a good without paying for it
b) The government provides goods for free
c) Consumers pay more than the market price
d) Producers cannot sell goods at a profit
Which of the following is a characteristic of a monopoly?
a) Many sellers
b) Homogeneous products
c) Barriers to entry
d) Perfect information
The ‘Laffer Curve’ illustrates the relationship between:
a) Government spending and economic growth
b) Tax rates and tax revenue
c) Inflation and unemployment
d) Supply and demand
Which of the following is an example of a quasi-public good?
a) National defense
b) Street lighting
c) A private swimming pool
d) A concert ticket
The ‘crowding out’ effect refers to:
a) Increased government spending leading to reduced private sector investment
b) Private sector investment leading to increased government spending
c) Government regulation leading to market inefficiencies
d) Private sector innovation leading to reduced government intervention
Which of the following is a primary function of public administration?
a) Profit maximization
b) Resource allocation
c) Taxation
d) Regulation of private businesses
The ‘Tragedy of the Commons’ refers to:
a) Overuse of a common resource leading to its depletion
b) Government failure to provide public goods
c) Underproduction of public goods
d) Inefficient allocation of resources in a market economy
Which of the following is an example of a positive externality?
a) Pollution from a factory
b) Noise from a construction site
c) Education leading to a more informed society
d) Traffic congestion
The ‘public goods problem’ arises because:
a) Public goods are non-excludable and non-rivalrous
b) Public goods are excludable and rivalrous
c) Private goods are non-excludable and non-rivalrous
d) Private goods are excludable and rivalrous
Which of the following is a tool of monetary policy?
a) Taxation
b) Government spending
c) Setting interest rates
d) Price controls
The ‘Coase Theorem’ suggests that:
a) Government intervention is necessary to correct market failures
b) Private parties can negotiate solutions to externalities without government intervention
c) Externalities always lead to market inefficiencies
d) Public goods should be provided by the government
Which of the following is an example of a public-private partnership?
a) A government-owned hospital
b) A privately owned school
c) A toll road operated by a private company under government contract
d) A public library
The Gini coefficient measures:
a) The total income of a country
b) The distribution of income within a country
c) The unemployment rate
d) The inflation rate
In the context of public administration, which of the following is considered a “budget deficit”?
a) Government expenditure is less than revenue
b) Government revenue is equal to expenditure
c) Government expenditure exceeds revenue
d) The government runs a balanced budget
The concept of ‘price elasticity of demand’ refers to:
a) The amount of goods produced by a firm
b) The responsiveness of the quantity demanded to a change in price
c) The total revenue generated from sales
d) The total cost of producing a good
Which of the following is an example of a government regulation designed to correct a market failure?
a) Minimum wage laws
b) Tax cuts for corporations
c) Deregulation of energy markets
d) Reduction in income taxes
Which of the following best describes the ‘fiscal multiplier effect’?
a) The impact of government tax increases on consumer spending
b) The impact of government spending on total economic output
c) The effect of a central bank’s interest rate changes on inflation
d) The effect of government regulations on business investment
The ‘public administration’ model of government primarily focuses on:
a) Maximizing profit in public enterprises
b) Making decisions based on political ideology
c) Efficiently delivering public services and managing public resources
d) Reducing government involvement in the economy
A government budget surplus occurs when:
a) Government revenue exceeds government spending
b) Government spending exceeds government revenue
c) The government borrows money
d) The government prints more money
The principle of ‘cost-benefit analysis’ is used in public administration to:
a) Calculate the taxes needed to fund government programs
b) Evaluate the effectiveness of public policies and programs
c) Determine how much money should be allocated for defense
d) Set interest rates for government loans
The term ‘externality’ refers to:
a) A transaction between two private parties
b) The unintended side effects of an economic activity on third parties
c) The government’s budget deficit
d) A government monopoly in a market
Which of the following is an example of a ‘negative externality’?
a) The creation of a public park
b) Education leading to a more informed society
c) Air pollution from a factory
d) The development of public transportation systems
Which economic model is typically used to explain the behavior of government when dealing with public goods and market failures?
a) The supply and demand model
b) The circular flow model
c) The public choice model
d) The Keynesian model
The ‘tax incidence’ refers to:
a) The effect of taxation on government revenue
b) The distribution of the tax burden between buyers and sellers
c) The total amount of taxes collected by the government
d) The administrative cost of collecting taxes
The ‘Pigovian tax’ is a tax levied to:
a) Encourage the production of public goods
b) Discourage negative externalities, such as pollution
c) Subsidize the production of merit goods
d) Decrease government spending on welfare programs
A ‘progressive tax’ system is one in which:
a) Tax rates decrease as income increases
b) Tax rates are fixed regardless of income
c) Higher incomes are taxed at higher rates
d) Everyone pays the same amount of taxes
Which of the following is an example of ‘redistributive policy’?
a) Public health care
b) Subsidies for agriculture
c) Building new infrastructure
d) Tax cuts for businesses
In the context of public administration, ‘bureaucracy’ refers to:
a) The system of elected officials making decisions
b) The administrative structure that implements public policies
c) The use of direct democracy in decision-making
d) The system of tax collection
The ‘crowding-out effect’ suggests that increased government spending may:
a) Lead to increased private investment
b) Decrease government borrowing
c) Reduce private sector investment
d) Have no impact on the economy
Which of the following is an example of a government intervention aimed at addressing income inequality?
a) Deregulation of the banking sector
b) Welfare programs and social security benefits
c) Privatization of public services
d) Lowering corporate taxes
Which of the following is an example of a ‘price ceiling’?
a) A maximum price on rent controlled apartments
b) A minimum wage law
c) A tariff on imported goods
d) A subsidy for renewable energy
The ‘multiplier effect’ suggests that an increase in government spending leads to:
a) A decrease in private investment
b) An increase in consumer savings
c) An increase in economic output greater than the initial spending
d) No effect on the overall economy
Which of the following is a ‘merit good’ according to economic theory?
a) Cigarettes
b) Public education
c) Luxury cars
d) Alcohol
In the context of economic policies, what is ‘privatization’?
a) The transfer of private assets to government control
b) The transfer of public assets to private ownership
c) The reduction of government intervention in the economy
d) The creation of new public sector jobs
A government subsidy to producers typically aims to:
a) Increase the cost of production
b) Decrease the quantity of goods produced
c) Lower the price of goods for consumers
d) Reduce government expenditure
The ‘public choice theory’ in economics is primarily concerned with:
a) The market mechanisms of supply and demand
b) The role of government in economic development
c) The behavior of politicians and voters in the context of economic decisions
d) The regulation of private businesses
The concept of ‘economies of scale’ suggests that:
a) As the scale of production increases, the average cost per unit decreases
b) The government should provide public goods to all citizens
c) Public administration should reduce government spending
d) Smaller businesses are more efficient than larger businesses
Which of the following is an example of a government market intervention to reduce inequality?
a) The imposition of tariffs on imports
b) Providing subsidies to low-income families
c) Cutting taxes for high-income earners
d) Privatizing the healthcare sector
The ‘Law of Diminishing Returns’ suggests that:
a) As the production of goods increases, the average cost per unit decreases
b) The more resources you add to a production process, the less additional output each new resource produces
c) More government spending always leads to higher economic growth
d) As income increases, the demand for all goods decreases
A ‘public good’ is characterized by which of the following features?
a) It is non-excludable and non-rivalrous
b) It is excludable but non-rivalrous
c) It is rivalrous but non-excludable
d) It is excludable and rivalrous
What does the term ‘tax incidence’ refer to?
a) The effect of taxation on consumer behavior
b) The allocation of tax revenue by the government
c) The distribution of the tax burden between buyers and sellers
d) The administrative cost of collecting taxes
In economics, which of the following is considered a ‘market failure’?
a) Perfect competition
b) Negative externalities, such as pollution
c) Price stability
d) Equilibrium in supply and demand
Which of the following best defines ‘public choice theory’?
a) The study of how the public sector should be organized
b) The study of how government spending affects private enterprise
c) The analysis of decisions made by government officials based on self-interest
d) The study of market dynamics in the absence of government intervention
A ‘progressive tax system’ is designed to:
a) Tax everyone equally, regardless of income
b) Tax lower-income individuals at higher rates
c) Tax higher-income individuals at higher rates
d) Avoid taxing individuals with low incomes
The primary purpose of ‘monetary policy’ is to:
a) Control government spending
b) Influence interest rates and the money supply to stabilize the economy
c) Determine the level of government taxation
d) Allocate public funds to infrastructure projects
The ‘invisible hand’ concept, introduced by Adam Smith, refers to:
a) The government’s role in controlling the economy
b) The tendency of markets to regulate themselves through supply and demand
c) The process of central planning in economies
d) The economic benefits of government intervention
In the context of public administration, ‘accountability’ refers to:
a) The process of allocating resources to public projects
b) Ensuring that government officials answer for their decisions and actions
c) The way tax revenues are distributed to various programs
d) The implementation of policies through legal frameworks
The ‘opportunity cost’ of a decision refers to:
a) The cost of the resources used to make a decision
b) The value of the best alternative that must be forgone when making a decision
c) The total revenue generated by a decision
d) The initial investment required for a decision
Which of the following is an example of a ‘merit good’?
a) Clean air
b) Private healthcare
c) Public libraries
d) Luxury cars
Which type of government spending is considered ‘discretionary’?
a) Social security payments
b) Interest on national debt
c) Military spending
d) Medicaid
The ‘Keynesian economic theory’ suggests that government should:
a) Reduce spending during economic recessions
b) Balance the budget at all costs
c) Increase government spending to stimulate economic activity during recessions
d) Eliminate all government intervention in the economy
The concept of ‘opportunity cost’ is most closely associated with which economic principle?
a) The importance of government regulation in markets
b) The necessity of allocating scarce resources efficiently
c) The dangers of excessive taxation
d) The role of international trade in economic growth
Which of the following is an example of ‘price discrimination’?
a) Charging a higher price to customers with more income
b) Charging different prices to different groups of consumers based on willingness to pay
c) Charging the same price for all consumers
d) Lowering prices to increase market share
A ‘public-private partnership’ typically involves:
a) The government monopolizing the provision of a public service
b) A cooperative arrangement between the government and private companies to deliver public goods or services
c) Complete privatization of a public service
d) The government avoiding any involvement in the provision of services
A government ‘price floor’ typically results in:
a) Shortages of goods or services
b) Price stability in the market
c) Surpluses of goods or services
d) An increase in consumer demand
The ‘Lorenz Curve’ is used to illustrate:
a) The trade-offs between inflation and unemployment
b) The distribution of income or wealth within a society
c) The relationship between government spending and tax revenue
d) The supply and demand of labor in the economy
Which of the following is a potential consequence of excessive government regulation?
a) Increased market competition
b) Lower prices for consumers
c) Reduced innovation and higher costs for businesses
d) Greater efficiency in resource allocation
The ‘public sector’ refers to:
a) Private businesses and corporations
b) Government-owned entities and organizations
c) Nonprofit organizations operating outside the government
d) The entire private economy of a country
The concept of ‘market failure’ occurs when:
a) The market operates at its optimal efficiency
b) The government controls all resources
c) Markets fail to allocate resources efficiently, often due to externalities or monopolies
d) There is perfect competition in the market
What is the main goal of ‘fiscal policy’?
a) To regulate the money supply
b) To control inflation through monetary measures
c) To manage government spending and taxation to influence the economy
d) To privatize public sector organizations
Which of the following is an example of a government providing a ‘merit good’?
a) A private healthcare system
b) A government-run public school system
c) A private transportation company
d) A luxury tax rebate for the wealthy
What does the ‘crowding-out effect’ describe?
a) A situation where public spending leads to a reduction in private sector investment
b) The increase in private sector spending as a result of lower taxes
c) The effect of government subsidies on reducing inequality
d) The tendency for government expenditure to stimulate private sector growth
Which of the following is an example of ‘market intervention’ by the government?
a) Tax cuts for corporations
b) Price controls on essential goods like food and gas
c) Subsidies for private businesses
d) A reduction in the national minimum wage
Which of the following is a characteristic of a ‘public good’?
a) It is excludable but non-rivalrous
b) It is non-excludable and non-rivalrous
c) It is rivalrous but non-excludable
d) It is excludable and rivalrous
Which of the following describes the ‘Keynesian approach’ to economic policy?
a) Emphasizing government spending to stimulate demand during recessions
b) Focusing on reducing taxes to promote private sector growth
c) Prioritizing long-term deficit reduction over short-term economic stimulation
d) Encouraging the government to decrease its role in economic activities
The ‘income tax’ is an example of which type of tax?
a) Regressive tax
b) Progressive tax
c) Proportional tax
d) Lump-sum tax
The ‘efficiency-equity trade-off’ in economics refers to:
a) The balance between economic growth and government regulation
b) The balance between achieving economic efficiency and distributing wealth equitably
c) The trade-off between government taxation and private sector growth
d) The trade-off between higher taxes and increased government spending
The ‘Gini coefficient’ is a measure of:
a) The government’s budget deficit
b) The level of inequality in income or wealth distribution
c) The inflation rate in the economy
d) The economic growth rate of a country
What is a ‘deflationary gap’?
a) The difference between potential GDP and the current GDP in times of inflation
b) The difference between the actual price level and the desired price level
c) The difference between actual GDP and the potential GDP during a recession
d) The difference between government spending and revenue during a recession
In economic terms, ‘externalities’ refer to:
a) The overall cost of running a business
b) Unpaid costs or benefits affecting third parties who are not directly involved in the transaction
c) The impact of inflation on consumer spending
d) Government-provided goods that are non-excludable and non-rivalrous
The ‘Phillips Curve’ demonstrates the inverse relationship between:
a) Government spending and inflation
b) Unemployment and inflation
c) Interest rates and economic growth
d) Taxation and public debt
What is the primary role of the ‘central bank’ in an economy?
a) To collect taxes
b) To regulate the stock market
c) To control the money supply and set interest rates
d) To provide direct financial assistance to businesses
The ‘opportunity cost’ of a public policy decision is:
a) The total monetary cost of the policy
b) The financial resources needed to implement the policy
c) The value of the next best alternative that is foregone as a result of the decision
d) The amount of government spending allocated to the policy
Which of the following is a characteristic of ‘monopolies’ that often necessitates government regulation?
a) Multiple firms compete for market share
b) The absence of barriers to entry
c) The ability to set prices without competition
d) The allocation of resources based on market demand
What is the purpose of a ‘price ceiling’ imposed by the government?
a) To prevent prices from rising too high
b) To encourage businesses to raise prices
c) To generate additional tax revenue
d) To decrease the quantity of goods in the market
Which of the following best describes the ‘Laffer Curve’?
a) The relationship between inflation and interest rates
b) The relationship between tax rates and tax revenue
c) The relationship between government spending and national debt
d) The relationship between income inequality and social unrest
Which of the following is an example of ‘regulatory policy’ in public administration?
a) Lowering interest rates to stimulate the economy
b) Introducing a minimum wage law
c) Reducing taxes on income
d) Subsidizing the production of renewable energy
The ‘budget deficit’ occurs when:
a) Government spending exceeds tax revenue
b) The government raises taxes to meet its expenditure
c) Government revenue exceeds government spending
d) Government revenue and spending are equal
Which of the following is a function of public administration in the context of economics?
a) Determining the supply and demand in the market
b) Establishing policies to allocate resources efficiently
c) Setting prices in competitive markets
d) Privatizing public services to reduce government involvement
What is the main goal of a ‘progressive tax system’?
a) To ensure that everyone pays the same amount in taxes
b) To ensure that those with higher incomes pay a larger share of their income in taxes
c) To decrease government revenue
d) To encourage investment by reducing taxes on businesses
What is meant by ‘public sector efficiency’?
a) The government’s ability to produce as much as possible at the lowest possible cost
b) The government’s ability to spend large amounts of money to improve services
c) The government’s ability to monopolize essential industries
d) The government’s capacity to redistribute wealth to the private sector
What does the term ‘economic surplus’ refer to?
a) The total cost of production in an economy
b) The situation where supply exceeds demand
c) The excess of income or value produced over the cost of resources used
d) The reduction in national debt due to economic growth
‘Privatization’ in public administration refers to:
a) Selling government-owned enterprises to private companies
b) Expanding government control over industries
c) Creating more public sector jobs
d) Increasing subsidies to private businesses
Which of the following describes a ‘regressive tax’?
a) A tax that increases as income increases
b) A tax that has a uniform rate regardless of income
c) A tax that disproportionately affects lower-income individuals
d) A tax applied only to luxury goods
Which of the following best defines ‘demand-side economics’?
a) Policies that focus on increasing the supply of goods and services
b) Policies that aim to boost consumer spending through fiscal stimulus
c) Policies that encourage businesses to increase production by reducing taxes
d) Policies that aim to regulate supply and demand in the labor market
What is the ‘tragedy of the commons’?
a) The tendency for private individuals to overuse a shared resource, leading to its depletion
b) The government’s role in regulating monopolies to prevent market failure
c) The market’s natural tendency to resolve externalities on its own
d) The inefficiency that occurs when public goods are underfunded
Which of the following describes the ‘marginal cost’ of a good or service?
a) The total cost of producing the good or service
b) The price at which the good or service is sold in the market
c) The additional cost of producing one more unit of the good or service
d) The opportunity cost of producing the good or service
The ‘public choice theory’ in economics is concerned with:
a) How individuals make decisions in the marketplace
b) How government officials and politicians make decisions based on self-interest
c) How to balance government spending and taxation
d) The optimal level of public goods provision
Which of the following is an example of an ‘externality’?
a) The rise in taxes to fund public education
b) The pollution caused by a factory that affects the surrounding community
c) The increase in private sector jobs during an economic boom
d) The government’s regulation of food safety standards
In economics, what is meant by ‘elasticity of demand’?
a) The rate at which the price of a good increases
b) The responsiveness of quantity demanded to a change in price
c) The amount of a good that can be produced at any given time
d) The government’s control over the pricing of goods
The term ‘deflation’ refers to:
a) A rise in the overall price level of goods and services
b) A decrease in the overall price level of goods and services
c) A stable price level in the economy
d) A sudden increase in the money supply
What does ‘monetary policy’ primarily aim to control?
a) Government spending on infrastructure
b) The total level of national output
c) The money supply and interest rates
d) The prices of essential goods
The term ‘public goods’ refers to goods that are:
a) Provided by private businesses and sold to consumers
b) Non-excludable and non-rivalrous, benefiting everyone in society
c) Excludable but non-rivalrous
d) Rivalrous and sold at competitive market prices
Which of the following is an example of a ‘negative externality’?
a) The provision of public parks that everyone can enjoy
b) The increase in property values caused by new infrastructure
c) The congestion and pollution caused by excessive car use in urban areas
d) The rise in government revenue due to higher taxes
The ‘fiscal multiplier’ refers to:
a) The effect of a change in government spending or taxation on the national income
b) The change in the inflation rate resulting from government spending
c) The relationship between the money supply and the interest rate
d) The relationship between the price of a good and the quantity demanded
‘Cost-benefit analysis’ in public policy is used to:
a) Estimate the total cost of a proposed policy
b) Compare the benefits of a policy against its associated costs
c) Determine the amount of tax revenue needed to fund a policy
d) Assess the political feasibility of a policy
What does the term ‘privatization’ refer to in the context of public administration?
a) The transfer of state-owned assets to private ownership
b) The increase in government regulation of private industries
c) The introduction of market-based competition in government sectors
d) The increase in public sector employment opportunities
Which of the following is a key characteristic of a ‘monopoly’?
a) Multiple firms competing for market share
b) A single firm that controls the entire supply of a good or service
c) The market is open to new competitors
d) Goods and services are provided for free to consumers
Which of the following best describes the role of public administration in the economy?
a) Managing public resources to achieve economic efficiency and equity
b) Setting wages for workers in the public sector
c) Dictating prices for essential goods and services
d) Eliminating all forms of market competition
In the context of public administration, ‘regulation’ is used to:
a) Increase the profit margins of private companies
b) Control the supply of money in the economy
c) Establish rules and standards to correct market failures
d) Remove government involvement in all economic activities
What does ‘market failure’ refer to in public economics?
a) A situation where supply and demand balance perfectly
b) The inability of the market to allocate resources efficiently
c) When a market produces an excess of goods and services
d) A situation where government regulations cause inefficiency
What is ‘price discrimination’ in the context of public administration?
a) Charging different prices for the same good based on income levels or other factors
b) Setting a single price for a good regardless of demand
c) Setting a price that is determined by a government body
d) Selling goods at a lower price to ensure market competition
What is a ‘negative externality’ in economics?
a) A benefit that affects only the producer of a good
b) An unintended consequence of an economic activity that affects third parties negatively
c) A government subsidy to promote a public good
d) A positive economic outcome for society as a whole
What is ‘supply-side economics’ primarily concerned with?
a) Increasing demand through consumer spending
b) Lowering taxes and reducing government intervention to encourage production
c) Raising interest rates to reduce inflation
d) Reducing government spending to balance the budget
In terms of public administration, what is the primary purpose of a ‘budget’?
a) To allocate funds to the private sector
b) To set limits on public sector wages
c) To plan and control government spending and revenue
d) To determine the amount of taxes each individual must pay
The ‘invisible hand’ concept, introduced by Adam Smith, suggests that:
a) Government should regulate all market activities
b) Market forces of supply and demand naturally regulate the economy
c) The economy should be completely controlled by central planning
d) Producers should fix prices based on competition
What does ‘opportunity cost’ refer to?
a) The cost of goods and services in a particular market
b) The next best alternative that must be forgone when making a decision
c) The amount of money spent on an investment
d) The benefit derived from investing in public goods
The term ‘tax incidence’ refers to:
a) The distribution of the burden of a tax between buyers and sellers
b) The amount of tax revenue collected by the government
c) The process of reducing tax rates to encourage investment
d) The ability of government to enforce tax laws
What is the ‘public goods problem’ in economics?
a) The tendency for markets to underproduce goods that are non-excludable and non-rivalrous
b) The oversupply of goods in the public sector
c) The issue of overregulation in the economy
d) The privatization of goods that should remain public
What does the ‘Law of Diminishing Returns’ state?
a) As production increases, the cost of producing additional units decreases
b) As more of a variable input is added to fixed inputs, the additional output will eventually decrease
c) Increased government regulation leads to higher production efficiency
d) The supply of labor in the economy grows exponentially
What does ‘monetary policy’ refer to in the context of public economics?
a) Government decisions related to taxation and spending
b) The use of government spending to influence economic activity
c) The control of the money supply and interest rates by central banks
d) The regulation of private businesses by the government
What is the concept of ‘moral hazard’ in public administration?
a) A situation where public officials act in the public interest
b) The tendency for individuals or organizations to take risks because they do not bear the full consequences
c) The risk of government intervention causing inefficiencies in the market
d) The consequences of ignoring environmental concerns in policy making
What does ‘crowding out’ mean in the context of government spending?
a) The tendency for increased government spending to lead to higher private sector investment
b) The reduction in private investment as a result of increased government borrowing and spending
c) The increase in government revenue from higher taxes
d) The government’s decision to reduce its spending on public goods
The ‘coase theorem’ suggests that:
a) Market inefficiencies can be resolved by government regulation
b) Private negotiations between parties can resolve externalities without government intervention
c) Public goods should be funded entirely by the government
d) Taxes should be imposed based on the level of income
What is the ‘business cycle’ in economics?
a) The period during which government controls the market
b) The alternating periods of economic growth and contraction in an economy
c) The ability of private businesses to set prices freely
d) The process of balancing trade deficits
‘Rent-seeking’ in public administration refers to:
a) The pursuit of profits through entrepreneurial innovation
b) The process of engaging in activities that increase an individual’s or organization’s wealth without contributing to productivity
c) The public’s involvement in government decision-making
d) The redistribution of wealth through progressive taxation
Which of the following is an example of ‘non-rivalrous’ goods?
a) A sandwich purchased at a store
b) A public park where anyone can visit without diminishing its availability to others
c) A concert ticket that only one person can use
d) A privately owned land parcel for sale
What is the ‘Gini coefficient’ used to measure?
a) The overall health of a country’s economy
b) The income inequality within a nation
c) The level of government spending on social services
d) The rate of inflation in an economy
What is the primary goal of economic stabilization policy in public administration?
a) To control inflation through wage freezes
b) To smooth out fluctuations in economic activity and maintain stable growth
c) To regulate private business activities and reduce competition
d) To ensure government spending aligns with tax revenue
The ‘Ricardian equivalence theorem’ suggests that:
a) Government borrowing is always detrimental to economic growth
b) Increased government borrowing today will lead to higher taxes in the future, causing individuals to save more now
c) Market failure can be solved by government intervention
d) Government spending automatically increases aggregate demand
What does ‘inflation targeting’ as a policy tool aim to achieve?
a) Increased government regulation of prices
b) Stable and predictable inflation levels
c) A reduction in consumer spending
d) The complete elimination of inflation
In terms of government policy, ‘fiscal policy’ refers to:
a) The control of interest rates by the central bank
b) Changes in government spending and tax policies to influence the economy
c) The regulation of financial markets to ensure stability
d) The enforcement of trade regulations with foreign countries
What is the main objective of a ‘progressive tax system’?
a) To tax all income at the same rate regardless of amount
b) To increase the government’s control over the economy
c) To ensure that higher-income individuals pay a larger share of taxes
d) To eliminate taxes on the wealthy
The ‘Laffer Curve’ illustrates the relationship between:
a) Government spending and economic growth
b) Tax rates and tax revenue
c) Unemployment rates and inflation
d) Government regulation and private sector output
In public administration, the term ‘monopoly’ refers to:
a) A market structure where many firms sell identical products
b) A government-owned company
c) A market situation where one firm controls the entire market for a good or service
d) A company that sells only luxury goods
What is ‘public choice theory’?
a) A theory that explores how public policies are made by governments based on citizens’ votes
b) A theory suggesting that private markets always lead to efficient outcomes
c) A theory that examines how government decisions are influenced by self-interest, similar to market behavior
d) A theory that argues against the use of government intervention in markets
The ‘free rider problem’ occurs when:
a) The government charges individuals for access to public goods
b) People benefit from a service or good without paying for it, relying on others to contribute
c) Market prices fail to reflect the true cost of a product
d) Government spending leads to economic inefficiencies
What is a ‘public-private partnership’ (PPP)?
a) A model where the government owns and operates all businesses
b) A cooperation between government and private entities to fund and deliver services or projects
c) A tax initiative aimed at reducing private sector involvement
d) A policy that prioritizes government services over private businesses
In the context of public administration, ‘cost-benefit analysis’ is used to:
a) Determine whether a government program’s benefits outweigh its costs
b) Set the minimum wage for public sector employees
c) Determine the optimal tax rate for businesses
d) Allocate government funds to political campaigns
What is meant by the term ‘crowding in’ in economic policy?
a) When government spending increases private sector investment due to lower interest rates or improved infrastructure
b) The tendency for government projects to create higher tax burdens for the public
c) The reduction in public sector investment as a result of private sector involvement
d) The reduction in government spending as a result of increased consumer demand
‘Quantitative easing’ is a monetary policy tool used by central banks to:
a) Increase government spending to stimulate economic growth
b) Raise interest rates to control inflation
c) Increase the money supply by purchasing financial assets from the market
d) Lower tax rates to encourage investment
The ‘Phillips Curve’ illustrates the trade-off between:
a) Unemployment and inflation
b) Government spending and revenue
c) Tax rates and economic growth
d) Interest rates and capital investment
Which of the following is an example of a ‘merit good’ in economics?
a) A television
b) A public library
c) A luxury car
d) A fast food restaurant
‘Pigovian taxes’ are designed to:
a) Increase government revenue to fund public goods
b) Correct market failures by taxing activities that generate negative externalities
c) Reward firms that reduce pollution
d) Support government subsidies for healthcare
What is the ‘social welfare function’ in economics?
a) A formula for calculating GDP growth
b) A measure of how government policies affect society’s overall well-being
c) A model for determining optimal tax rates
d) A system used to calculate inflation rates
What does the ‘paradox of thrift’ suggest?
a) Increased saving by individuals during a recession can lead to reduced overall demand in the economy
b) Public sector savings increase overall economic growth
c) High levels of consumer spending lead to inflation
d) Government spending leads to higher national savings rates
In public economics, ‘externalities’ refer to:
a) Costs or benefits that affect third parties who are not involved in the transaction
b) Benefits that can only be enjoyed by the government
c) The price controls imposed by the government
d) The relationship between labor unions and government policies
In economic terms, ‘marginal utility’ refers to:
a) The total satisfaction derived from consuming all units of a good or service
b) The satisfaction gained from consuming an additional unit of a good or service
c) The price of a good or service relative to its demand
d) The economic loss caused by overconsumption
In terms of income distribution, the ‘Lorenz Curve’ is used to:
a) Illustrate the relationship between unemployment and income
b) Show the distribution of income across different groups in society
c) Measure the impact of taxes on income inequality
d) Depict the cost-benefit analysis of government redistribution programs
The ‘Gini coefficient’ is used to measure:
a) The total tax revenue of a country
b) The effectiveness of public goods provision
c) Income inequality in a population
d) The efficiency of government expenditure
A progressive tax system is one that:
a) Imposes the same tax rate on all income levels
b) Reduces the tax burden on high-income earners
c) Imposes higher tax rates on higher income earners
d) Shifts the tax burden from individuals to corporations
The ‘poverty line’ is defined as:
a) The average income earned by the wealthiest 10% of the population
b) A threshold of income below which an individual or family is considered to be living in poverty
c) A measurement of income inequality across a nation
d) A measure of the average wealth held by a typical household
What is a ‘negative externality’ in economics?
a) A benefit enjoyed by third parties from a transaction they are not involved in
b) An unintended cost imposed on third parties by a transaction they are not part of
c) A price subsidy given to a specific industry
d) The public cost of providing public goods
An example of a negative externality is:
a) A company building a new public park
b) Pollution from a factory affecting local residents’ health
c) The spread of education through public schools
d) A city constructing public transportation infrastructure
To address negative externalities, the government might implement:
a) Price controls to reduce the cost of private goods
b) Subsidies to encourage private sector investment
c) Taxes or regulations on the activities causing harm
d) The elimination of public goods in affected areas
A ‘positive externality’ occurs when:
a) The government imposes taxes on private businesses to reduce their profits
b) A transaction benefits third parties who are not part of the exchange
c) The price of a good exceeds the benefits to society
d) Public goods are made available only to a select group of individuals
The provision of public education is an example of a:
a) Negative externality
b) Public good
c) Private good
d) Market failure
Which of the following is a characteristic of a ‘public good’?
a) It is non-excludable and non-rivalrous
b) It is only provided by the private sector
c) It is rivalrous but excludable
d) It can only be consumed by those who can afford it
Which of the following would be an example of a public good?
a) A concert ticket
b) National defense
c) A branded luxury handbag
d) A private school education
A key issue with public goods is:
a) They can lead to excessive government taxation
b) They create over-consumption by wealthier individuals
c) They are prone to market failure due to free-rider problems
d) They create monopolies in the private sector
The free-rider problem refers to:
a) The difficulty in charging people for the use of public goods
b) The tendency of individuals to avoid paying for public goods while still benefiting from them
c) The inability of government to manage externalities effectively
d) The way private businesses exploit public goods for profit
‘Market failure’ occurs when:
a) The government regulates prices to prevent monopolies
b) The allocation of goods and services by a free market is not efficient
c) The economy experiences a recession
d) There is a shortage of public goods
Which of the following is a reason why public goods are often underprovided by the market?
a) High production costs that discourage private firms
b) People avoid paying for them due to the free-rider problem
c) They require excessive government regulation to be effective
d) They are often overproduced, leading to waste
The government may finance the provision of public goods through:
a) Market-based prices and private sector investment
b) Sales taxes or general taxation
c) Subsidies to private corporations
d) Direct investments in private enterprises
In economics, a ‘common-pool resource’ refers to:
a) A resource that is non-rivalrous but excludable
b) A resource that is rivalrous but non-excludable
c) A resource provided exclusively by the government
d) A good that is privately owned but publicly accessible
What is the ‘tragedy of the commons’?
a) The overuse and depletion of a common-pool resource due to individual self-interest
b) The unequal distribution of resources by the government
c) The failure of markets to distribute wealth efficiently
d) The inability of the public sector to provide adequate public goods
What is the most common government intervention to address externalities?
a) Imposing taxes or subsidies to influence behavior
b) Enforcing government monopolies in all industries
c) Reducing public spending on goods and services
d) Reducing the level of competition in the private sector
What role does government play in the provision of public goods?
a) It creates monopolies to ensure the production of goods
b) It distributes goods only to those who pay for them
c) It ensures public goods are available to all, regardless of payment
d) It restricts the consumption of public goods to reduce wastage
Which of the following is an example of a positive externality?
a) A factory emitting harmful pollutants into the air
b) A flu vaccination program that reduces the spread of disease in the community
c) The construction of a highway that disrupts local wildlife
d) A company polluting a nearby river, affecting the local ecosystem
Which of the following is a characteristic of a ‘merit good’?
a) It is provided for free by the private sector
b) It is a good that has positive externalities, and is often under-consumed if left to the market
c) It is a good that is non-rivalrous and non-excludable
d) It is a good with no significant social value
Which government action would most likely reduce income inequality?
a) Tax cuts for the wealthy
b) Expansion of public welfare programs
c) Deregulation of the labor market
d) Reduction of public education funding
The ‘free-rider problem’ in public goods means that:
a) Individuals or firms will under-produce public goods because there is no financial incentive
b) Individuals will only pay for public goods when they can prove they are truly needed
c) People can benefit from a good without paying for it, leading to under-provision of the good
d) The government often uses free-market solutions to provide public goods
A policy to address negative externalities may include:
a) Providing subsidies to the affected industry
b) Reducing government regulation in the affected market
c) Implementing taxes or cap-and-trade systems to discourage harmful activities
d) Encouraging free-market solutions to address the externality
Which of the following is an example of income redistribution by the government?
a) Lowering corporate tax rates to stimulate economic growth
b) Providing public health insurance for low-income citizens
c) Privatizing government-run public services
d) Lowering income tax rates across all income brackets
Which of the following is an example of a public good?
a) A toll road
b) A private swimming pool
c) A national park
d) A private library
The concept of ‘income elasticity of demand’ refers to:
a) The responsiveness of the quantity demanded of a good to changes in income
b) The responsiveness of demand for a good to changes in its price
c) The total demand for a good across all income groups
d) The difference between public and private goods in terms of income distribution
Which of the following would most likely be considered a government-provided public good?
a) A public library
b) A subscription to a cable television service
c) A private school education
d) A branded sports club membership
What is the primary reason for the government to intervene in the provision of public goods?
a) To ensure that private businesses can make a profit
b) To make sure that public goods are not overproduced
c) To address the issue of underproduction or non-production in the private market
d) To regulate the price of public goods in the market
Which of the following is an example of a non-rivalrous public good?
a) A parking space
b) Clean air
c) A concert ticket
d) A slice of pizza
What is the primary role of the government in providing public goods?
a) To ensure public goods are available for profit-making purposes
b) To supply public goods efficiently to all citizens, even when market provision fails
c) To make public goods available to only the wealthiest individuals
d) To limit access to public goods based on individual contributions
The ‘progressive tax system’ is designed to:
a) Impose higher tax rates on those with higher incomes
b) Ensure that everyone pays the same amount of taxes
c) Provide tax breaks for low-income individuals
d) Discourage savings among the wealthy
In the context of income distribution, ‘redistributive policies’ aim to:
a) Promote income inequality in the economy
b) Reduce income inequality by redistributing wealth
c) Increase economic growth by encouraging savings
d) Increase the income of high-income individuals
Which of the following is a characteristic of a ‘public good’ in economic terms?
a) It is both rivalrous and excludable
b) It is available only to paying consumers
c) It is non-rivalrous and non-excludable
d) It is produced in limited quantities for market consumption
An example of a ‘common-pool resource’ is:
a) A clean air supply in a city
b) A national defense system
c) A fishing lake where overfishing occurs
d) A toll road that charges users
The primary cause of the ‘tragedy of the commons’ is:
a) Over-regulation of natural resources
b) Individuals acting in their self-interest without regard for the collective welfare
c) Governments failing to provide sufficient public goods
d) The overproduction of public goods by the government
To correct market failures caused by externalities, governments often:
a) Introduce regulations or taxes to align private incentives with social welfare
b) Provide financial incentives for businesses to pollute more
c) Increase the availability of public goods to consumers
d) Decrease the level of competition in markets
Which of the following is the best example of a positive externality?
a) Air pollution from a factory
b) Noise pollution from construction work
c) The creation of public parks in a neighborhood
d) Traffic congestion caused by commuters
Which of the following is an example of income redistribution?
a) Lowering the corporate tax rate
b) Implementing a universal healthcare system
c) Providing subsidies to wealthy corporations
d) Cutting public spending on education