Political Economy: Checkpoint 2

Covers democracy and economics, public choice theory, and institutions.

Five questions on how democratic incentives and institutions shape economic outcomes.

Question 1 of 5 The 'median voter' idea helps explain why:

Elections are always decided by a landslide Competing parties often converge toward centrist policy positions Voting is mandatory in most democracies Economic policy never changes after an election

Question 2 of 5 'Rational ignorance' describes:

Voters being unintelligent A reasonable choice to invest little time researching policy, since one vote rarely changes an outcome A law banning uninformed voting A type of central bank policy

Question 3 of 5 Public choice theory applies standard economic reasoning to:

Only consumers, never government Politicians, bureaucrats and voters, not just consumers Only voters, never politicians International trade exclusively

Question 4 of 5 'Rule of law' primarily refers to:

Having a large number of laws Laws being applied consistently and predictably, including to the powerful A country having a written constitution Strict tariffs on all imports

Question 5 of 5 Weak institutions and rule of law tend to discourage long-term investment mainly because:

They make investment illegal They create uncertainty about whether contracts and property will be protected They automatically raise taxes They only affect government spending, not private business

← Back to Institutions Next lesson → Corruption

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