Question 1

When a government program is justified not on its merits but on the number of jobs it will create,&#10;A)the program is an efficient use of taxpayer dollars.&#10;B)it should be approved only if the unemployment rate is low.&#10;C)taxes should be raised to fund the program.&#10;D)it is known as the &#34;broken window fallacy.&#34;

Accepted Answer

Justifying a program based solely on job creation without considering its overall economic impact is known as the "broken window fallacy." This fallacy occurs when one focuses on the visible, positive effects of a program (i.e., job creation) without considering the opportunity cost or unseen negative consequences (i.e., resources diverted from more productive uses). It is important to consider the overall efficiency and effectiveness of a program, not just its potential to create jobs.

Question 2

According to economist John Maynard Keynes,a great economist must also be a(n)&#10;A)mathematician.&#10;B)historian.&#10;C)philosopher.&#10;D)All of the above are correct.

Accepted Answer

John Maynard Keynes believed that a great economist must not only have a strong foundation in mathematics but must also be knowledgeable in history and philosophy to understand how society and human behavior influence economic outcomes. Thus, all of the options are correct.

Question 3

John Maynard Keynes described economics as an easy subject at which very few excel.Which of the following is not one of the reasons Keynes gave for why so few people excel at the study of economics?&#10;A)An economist must also be a mathematician,historian,statesman,and philosopher in some degree.&#10;B)An economist must understand symbols and speak in words.&#10;C)An economist must be purposeful and disinterested in a simultaneous mood.&#10;D)An economist must understand environmental science,regulation,and political science.

Accepted Answer

Keynes did not mention environmental science, regulation, and political science as necessary skills for excelling in economics.

Question 4

Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents.As a student of economics,you know that&#10;A)this is a case of the &#34;broken window fallacy.&#34;&#10;B)this is a great use of taxpayer dollars.&#10;C)this policy diverts money from spending somewhere else in the economy.&#10;D)Both a and c are correct.

Accepted Answer

The justification given by Congressman Dearmark is an example of the "broken window fallacy," which states that spending money on something that destroys a valuable asset, such as a window or a building, leads to job creation and economic growth. However, this policy diverts money from spending elsewhere in the economy, which may lead to a better return on investment. Therefore, both option A and C are correct.

Question 5

John Maynard Keynes referred to economics as an easy subject,&#10;A)at which very few excel.&#10;B)but not as easy as philosophy or the pure sciences.&#10;C)which very few can enjoy.&#10;D)which deals primarily with common sense.

Accepted Answer

In his book "The General Theory of Employment, Interest and Money," Keynes wrote: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and social philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil." He also said, “The difficulty lies not in the new ideas, but in escaping the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds."

Question 6

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

A)Most people who study economics are not very bright.
B)Good economists must possess a rare combination of gifts.
C)Economics is quite boring;hence,people tend to lose interest in it before mastering it.
D)Good thinkers become frustrated with economics because it does not make use of the scientific method.

Accepted Answer

Keynes believed that good economists must possess a rare combination of gifts, including a good understanding of mathematics, a sound judgement of human psychology, and the ability to make non-obvious connections between different economic phenomena. Therefore, he believed that while economics may not be as difficult as philosophy or pure science, it still requires a exceptional set of skills and talents that only a few possess.

Deck 2: 4: Sec 24 Mc Lets Get Going