Given that much of the Department of Education's budget is allocated to postsecondary education (including Pell grants and student loans), closing the department would have no measurable effect on the average K to 12th grade school student.

Link: https://www.kentclarkcenter.org/wp-content/uploads/2024/11/USDeptOfEducation_2024_Appropriations.pdf

Question A: The Trustees of the U.S. Social Security system currently estimate that the OASI trust fund will be exhausted in 2033, after which substantial benefit cuts are mandated without a change in the law.

The response to the impending exhaustion of the OASI trust fund is likely to rely more on general government borrowing than on increases in social security taxes or reductions in social security benefits.

Question B: As in the most recent major change in Social Security finances (adopted in 1983), the most prudent way to address the impending exhaustion of the OASI trust fund would feature a balanced combination of payroll tax increases and reductions in the benefits received for any given retirement age.

Question A: The institutions of society - such as constitutions, laws, judiciaries, and property rights - substantially shape economic decisions, policies, and outcomes.

Question B: On average and over the long term, democracies deliver substantially better economic growth than other forms of government.

Question C: Countries where democracy and the rule of law are weakened are likely to experience measurable damage to their economic performance.

Question A: The Democrats and Republicans have floated the idea of a US sovereign wealth fund. For background, see here and here.

Establishing a domestic sovereign wealth fund to invest in infrastructure, emerging technologies, and/or strategic sectors would bring substantial benefits to the US economy over a ten-year horizon.

Question B: The typical advanced economy could substantially boost growth by establishing a sovereign wealth fund to invest in infrastructure, emerging technologies, and/or strategic sectors.

Question C: For a typical advanced economy, establishing a sovereign wealth fund would be substantially better for citizens relative to paying down the debt as a use for excess revenue.

Question A: Capping annual rent increases by corporate landlords at 5%, as proposed by President Biden, would make middle-income Americans substantially better off over the next ten years.

Question B: Capping annual rent increases at 5%, as proposed by President Biden, would substantially reduce the amount of available apartments for rent over the next ten years.

Question C: Capping annual rent increases at 5%, as proposed by President Biden, would substantially reduce US income inequality over the next ten years.

Question A: All else equal, making permanent the 2017 tax cuts that were set to expire at the end of 2025 would substantially increase federal deficits and the federal debt over the coming decade.

Question B: All else equal, making permanent the 2017 tax cuts that were set to expire at the end of 2025 would measurably increase the rate of US economic growth over the coming decade.

Question C: In the US, given Congressional budget scoring rules, temporary tax cuts generate sufficient pressure for extension as to be effectively permanent.

Question A: The lower willingness of private firms to go public, combined with the increased number of publicly traded firms being taken private over the last 25 years, is measurably net negative for economic growth.

Question B: All else equal, reducing regulatory barriers (including reporting requirements such as Sarbanes Oxley 404) to public listing would substantially increase the share of publicly traded firms in the economy.

Question C: The lack of transparency about unlisted private firms' financial performance substantially hinders the efficiency of the allocation of capital.

Question A: Antitrust investigations of the dominant firms in artificial intelligence are likely to lead to substantially lower prices of AI products and services for businesses and consumers.

Question B: Antitrust investigations of the dominant firms in artificial intelligence are likely to promote greater competition and innovation in AI.

Question C: Potential harms from artificial intelligence are better assessed by market deployment rather than seeking to slow the pace of AI research and implementation.

Question A: The proposed US tariffs on Chinese EVs would lead to measurably higher employment in the US automotive industry over the next five years.

Question B: The proposed US tariffs on Chinese EVs would lead to measurably higher prices of EVs in the US.

Question C: The proposed US tariffs on Chinese EVs would measurably slow the adoption of green technology by consumers.

Reclassifying marijuana as a Schedule III drug would lead to measurably higher social welfare.

Question A: Tripling existing import taxes on Chinese steel and aluminum products would lead to measurably higher employment in the US steel industry over the next five years.

Question B: Tripling the tariffs would lead to measurably higher steel and aluminum prices for American producers and measurably higher finished-good prices for American consumers.

Question C: The gains for the American economy from tripling the tariffs would measurably outweigh the losses.

Universities that abandon temporary pandemic test-optional policies and return to requiring standardized test scores for admissions will create measurably enhanced opportunities for potentially high-achieving students from low-income backgrounds.

Question A: The FTC is opposed to Kroger’s proposed acquisition of Albertsons. Critics argue that with sufficient divestitures, the deal would be consistent with past FTC policies.

Kroger’s proposed acquisition of Albertsons would lead to substantially higher grocery prices and/or lower product quality/services for customers of the two companies in locations where both are present.

Question B: Kroger’s proposed acquisition of Albertsons would have a substantially negative effect on workers at the two companies in locations where both are present.

Question A: Allowing Medicare to negotiate prices with pharmaceutical companies will lead to a substantial reduction in the costs of prescription drugs for US retirees.

Question B: Allowing imports of medicines from Canada will lead to a substantial reduction in the costs of prescription drugs for US consumers without compromising safety.

Question A: A tolling program for New York City is out for public consultation with proposed charges on vehicles entering the central business district of Manhattan summarized here: https://new.mta.info/document/129191

The proposed tolls on vehicles entering the central business district of Manhattan are likely to lead to a substantial reduction in traffic congestion in the targeted area.

Question B: The proposed tolls on vehicles entering Manhattan are likely to lead to a substantial increase in traffic congestion just outside the central business district, above 60th Street, in the outer boroughs and New Jersey.

Question A: The economic and financial sanctions against Russia are substantially limiting its ability to wage war on Ukraine.

Question B: In the absence of continuing flows of Western economic aid, Ukraine's wartime economy will be substantially compromised.

Question A: Nippon Steel’s proposed acquisition of US Steel would lead to substantially less employment in the US steel industry than in the absence of such a deal.

Question B: Nippon Steel’s proposed acquisition of US Steel would cause no measurable damage to the American economy.

Question A: The fundamental cause of Argentina’s high inflation is unfunded fiscal commitments that are being financed by the central bank.

Question B: Even if Argentina could marshal the resources to make a full switch to using US dollars for domestic transactions, it would substantially increase the volatility of Argentine GDP.

Question A: US GDP is substantially higher now as a result of the passage of the TCJA than it would have been had the TCJA not been passed, and all else was equal.

Question B: Corporate capital stock is substantially higher now as a result of the passage of the TCJA than it would have been had the TCJA not been passed, and all else was equal.

Question C: Real median wages are substantially higher now as a result of the passage of the TCJA than they would have been had the TCJA not been passed, and all else was equal.

Question D: Federal tax revenues are substantially lower now as a result of the passage of the TCJA than they would have been had the TCJA not been passed, and all else was equal.

Question E: Charitable donations are substantially lower now as a result of the passage of the TCJA than they would have been had the TCJA not been passed, and all else was equal.

Shifting the burden of municipal property taxes towards land and away from improvements such as buildings - as proposed in the Detroit land value tax plan - will enhance the incentives for owners to develop their land and thereby give a substantial boost to local economic growth over a ten-year horizon.

Question A: By enabling women’s life choices about education, work and family, the contraceptive pill made a substantial contribution to closing gender gaps in the labor market for professionals.

Question B: Gender gaps in today’s labor market arise less from differences in educational and occupational choices than from the differential career impact of parenthood and social norms around men's and women’s roles in childrearing.

Question C: The gender gap in pay would be substantially reduced if firms had fewer incentives to offer disproportionate rewards to individuals who work long and/or inflexible hours.

Question A: Fiscal rules on budget deficits and public debt levels are an essential part of a sound fiscal framework.

Question B: Since the inception of the Stability and Growth Pact, budget deficits in Europe have been measurably lower, on average, than would have been the case without common budget rules.

Question C: Since the inception of the Stability and Growth Pact, the path of GDP growth in Europe has been measurably more stable than would have been the case without common budget rules.

Question A: Non-bank financial intermediaries pose a substantial threat to financial stability.

Question B: Regulating the leverage and liquidity of non-bank financial intermediaries would substantially improve financial stability.

Question C: Given current regulations, non-bank financial intermediaries should not have access to central bank support.

Question A: An $8 cap on late fees for credit cards, as proposed by the Consumer Financial Protection Bureau, would lead to a substantial reduction in overall costs for consumers.

Question B: Requiring that all credit card fees and interest rates be transparent, prominently displayed, and easily searchable online would lead to a substantial reduction in overall costs for consumers.

Question C: Consumers would be measurably better off if efforts to reduce the impact of so-called ‘junk fees’ across the economy concentrated on making fees more transparent than on capping specific types of fees.

Question A: When evaluating the consequences of any shifts in economic policy regimes, it is essential to consider potential changes in the behavior of economic agents due to revised expectations.

Question B: The empirical evidence on how monetary policy affects the economy in the short run is most consistent with the assumption that economic agents form rational expectations.

Question C: Economic research has established that the welfare consequences of differences in countries’ growth and level of development are substantially higher than the welfare costs of business cycles.

Question A: If enacted and technologically effective, a national ban on the use of TikTok would have a measurably negative impact on US innovation.

Question B: If enacted and technologically effective, a national ban on the use of TikTok would have a measurably positive impact on the profits of the big US tech companies.

Question A: Use of artificial intelligence over the next ten years will lead to a substantial increase in the growth rates of real per capita income in the US and Western Europe over the subsequent two decades.

Question B: Use of artificial intelligence over the next ten years will have a substantially bigger impact on the growth rates of real per capita income in the US and Western Europe over the subsequent two decades than the internet has had over the past two decades.

Question A: Use of the renminbi in world trade, as a reserve currency, and/or for foreign bond denomination is likely to increase substantially relative to the dollar over the next ten years.

Question B: Ceteris paribus, a shift to a more multi-polar international monetary system would have substantial negative implications for the US economy.

Question A: Financial regulators in the US and Europe lack the tools and authority to deter runs on banks by uninsured depositors.

Question B: Not guaranteeing uninsured deposits at Silicon Valley Bank in full would have created substantial damage to the US economy.

Question C: Fully guaranteeing uninsured deposits at Silicon Valley Bank substantially increases banks’ incentives to engage in excessive risk-taking.

Question A: If it is implemented, the proposed increase in the tax rate on earned and business income above $400,000 in the Biden budget, along with other proposed changes to Medicare, would extend the solvency of the Medicare program for the next 25 years.

Question B: If it is implemented, the proposed reform of Medicare drug negotiations in the Biden budget is likely to lead to a substantial reduction in drug prices for beneficiaries.

Question C: If it is implemented, the proposed reform of Medicare drug negotiations in the Biden budget is likely to lead to a substantial reduction in the development of beneficial new drugs.

Question A: Imposing stronger legal liability on online platforms for content posted by users would substantially reduce the amount of user-generated content available on those platforms.

Question B: Imposing stronger legal liability on online platforms for content posted by users would substantially damage those platforms’ advertising businesses.

Question C: Imposing stronger legal liability on online platforms for content posted by users would substantially reduce the amount of misinformation and disinformation present on those platforms.

Question A: Adam Smith’s metaphor of the invisible hand has been foundational to the development of modern economic theory.

Question B: Adam Smith’s metaphor of the invisible hand has been commonly misinterpreted as advocacy for pure laissez-faire capitalism.

Question A: A combination of the US federal government having to defer some invoice, benefit, and salary payments, and miss payments on Treasury securities for several weeks would do substantial damage to financial markets.

Question B: A combination of the US federal government having to defer some invoice, benefit, and salary payments, and miss payments on Treasury securities for several weeks would lead to substantially lower employment within six months.

Question C: The requirement to periodically increase the debt ceiling measurably reduces the long-run size of the debt.

Question A: Prohibiting firms from imposing employment contract provisions that prevent workers from moving to a competitor or starting a competing business would lead to a substantial increase in wages in the affected industries.

Question B: A ban on non-compete clauses would lead to a measurable increase in innovation.

Question C: A ban on non-compete clauses would lead to a measurable reduction in firms’ investment in staff training.

Question A: The market power of ticket-selling intermediaries leads to consumers who ultimately attend the music events paying substantially more and producers receiving substantially less than they would if the intermediary sector were more competitive.

Question B: The present system of initial ticket selling and reselling through secondary ticket intermediaries often leads to large transfers between different groups of ticket buyers that could be partially captured by artists through higher initial ticket prices.

Question C: Artists set prices at less than market-clearing levels in an effort to provide access for fans with modest incomes.

Question A: Network externalities give Twitter an incumbent advantage that will slow substantially the migration of users who would prefer alternative platforms.

Question B: As of now, there needs to be more government regulation around Twitter’s content moderation and personal data protection.

Question A: When economic policy-makers are unable to commit credibly in advance to a specific decision rule, they will often follow a poor policy trajectory.

Question B: Rules-based fiscal policies deliver substantially better outcomes than purely discretionary, on the spot, policy choices.

Question A: Given the centrality of semiconductors to the manufacturing of many products, securing reliable supplies should be a key strategic objective of national policy.

Question B: Restrictions on exports of semiconductors and related high-tech equipment to China will substantially improve US technological leadership.

Question A: Research on the nature and impact of bank runs has made it possible to limit substantially the wider economic damage from financial crises.

Question B: Reforms of financial regulation since 2008 (and macroprudential policies in some countries) will not substantially reduce the probability of financial crises.

Question A: In the aftermath of Hurricane Ian, the level of Florida’s GDP in five years will be substantially lower than it otherwise would.

Question B: The prospect of further costly extreme weather events means that there is a substantial chance that some private property insurance markets will no longer exist in ten years in states such as Florida.

Question C: Without large government subsidies, mandated flood insurance requirements would substantially reduce losses from subsequent natural disasters by encouraging economic activity to migrate from the most flood-prone areas.

Question A: The administration’s loan relief plan will not have a substantial impact on inflation in either direction.

Question B: A longer-term impact of the administration’s loan relief plan is likely to be substantially higher tuition fees at some universities.

Question C: A longer-term impact of the administration’s loan relief plan is likely to be measurably higher student debt burdens in anticipation of future forgiveness.

Question A: A price cap imposed by the G7/EU countries on purchases of Russian oil and oil-related products (and which applies to all importers of Russian oil using Western trade infrastructure, shipping, and insurance) would be an effective measure to reduce the flow of revenues to Russia.

Question B: The oil price cap imposed by the G7/EU countries will not have a substantial effect on the world oil price (such as the Brent crude benchmark).

Question A: The current $7,500 tax credit for purchasing electric vehicles is regressive.

Question B: To encourage greater take-up of electric vehicles, public expenditure on infrastructure to support them (such as charging stations) is likely to be more cost-effective than providing equivalent amounts as tax credits/purchase rebates for buyers.

Question A: Laws restricting access to abortion are likely to have a negative impact on women's educational attainment, labor market participation, and earnings, particularly those in households of lower socio-economic status.

Question B: States that ban abortion are likely to suffer significant economic losses.

Question A: Increased unionization of the American workforce would give a noticeable boost to the earnings of current workers who become eligible to be members.

Question B: Increased unionization of the American workforce would give a noticeable boost to wages for the median household.

Question C: Increased unionization of the American workforce would have a net positive effect on employment.

Question A: It would serve the US economy well to make it unlawful for companies with revenues over $1 billion to offer goods or services for sale at an “unconscionably excessive price” during an exceptional market shock.

Question B: It would serve the US economy well if companies making quarterly SEC filings were obliged to include a tabulation of all price changes of goods or services sold, together with the associated cost changes.

Stablecoins that are not fully backed by either central bank reserves or government securities with minimal price volatility are inherently vulnerable to runs.

High tariffs imposed by the European Union on imports of Russian natural gas would be an effective measure to reduce the flow of revenues to Russia while limiting disruption to supplies to Europe.

Question A: A windfall tax on the profits of large oil companies – with the revenue rebated to households – would provide an efficient means to protect the average US household from rising energy costs.

Question B: Temporary suspension of state and federal gas taxes would lead to a meaningful and immediate reduction in consumer prices at the pump.

Question A: The fallout from the Russian invasion of Ukraine will be stagflationary in that it will noticeably reduce global growth and raise global inflation over the next year.

Question B: The economic and financial sanctions already implemented will lead to a deep recession in Russia.

Question C: Targeting the Russian economy through a total ban on oil and gas imports carries a high risk of recession in European economies.

Question D: Weaponizing dollar finance is likely to lead to a significant shift away from the dollar as the dominant international currency.

Question A: High volatility in the prices of crypto assets such as Bitcoin, Dogecoin, and Ethereum largely reflects movements in investor sentiment rather than news about potential sources of fundamental value (such as possible applications, or use in illicit transactions).

Question B: Given existing regulations, as crypto assets grow in value and become more connected to the rest of the financial system, the fluctuations in their valuations pose a serious risk to financial stability in advanced economies.

Question A: A permanent version of the 2021 expansion of the child tax credit would reduce child poverty substantially.

Question B: The costs of increasing resources for low-income families via the expanded child tax credit would be substantially offset over the longer term by the fiscal benefits of improving life outcomes for children no longer growing up in poverty.

Question C: Parental labor supply would be unlikely to fall significantly following reintroduction of the expanded child tax credit.

Question A: Firms’ incentives to reduce costs by sourcing inputs and products abroad have caused many American industries to become more vulnerable to supply chain disruptions.

Question B: Private firms have inadequate incentives to make investments to reduce the risk that disruptions in the supply of imports will cause shortages and raise domestic prices.

Question C: Global supply chain disruptions are the main driver of elevated US inflation over the past year.

Question A: A significant factor behind today’s higher US inflation is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins.

Question B: Antitrust interventions could successfully reduce US inflation over the next 12 months.

Question C: Price controls as deployed in the 1970s could successfully reduce US inflation over the next 12 months.

Question A: Even without renewed Covid-19 restrictions, uncertainty about the health threat from the Omicron variant is likely to deliver a significant hit to economic activity from now through the first half of 2022.

Question B: If world vaccine supply continues to be limited, global social welfare would rise by more if those vaccines were made widely available across Africa (with support for effective delivery) rather than accelerating booster vaccinations in rich countries.

Question C: Imposing travel bans on countries where new Covid-19 variants are discovered will make it less likely that countries will reveal new variants to the rest of the world.

Question A: The supply bottlenecks that are currently contributing to rising prices can be reasonably expected to abate without causing inflation over the longer term to be above the Fed’s target.

Question B: The current combination of US fiscal and monetary policy poses a serious risk of prolonged higher inflation.