Question 1

Gramm-Rudman was effective in reducing the federal budget deficit only on paper.

Accepted Answer

A) True 
 B)False

Question 2

The federal budget acts as a component of fiscal policy by

Accepted Answer

A)  stimulating the economy as deficits are reduced 
B)  stimulating the economy as deficits are increased 
C)  controlling the growth of the money supply 
D)  changing the discount rate 
A)  stimulating the economy as deficits are reduced 
B)  stimulating the economy as deficits are increased 
C)  controlling the growth of the money supply 
D)  changing the discount rate

Question 3

The use of monetary policy and fiscal policy are the federal government's two primary instruments of accomplishing macroeconomic goals and achieving economic stability.

Accepted Answer

A) True 
 B)False

Question 4

The Tax Reform Act of 1986 was an effort to make the federal tax system fairer, simpler and more efficient. It retained many major deductions for itemizing except:

Accepted Answer

A)  interest on consumer loans 
B)  medical expenses 
C)  home mortgage interest 
D)  charitable contribution 
A)  interest on consumer loans 
B)  medical expenses 
C)  home mortgage interest 
D)  charitable contribution

Question 5

President Reagan administration's supply-side policies resulted in a 5 percent and 10 percent cuts in personal income taxes.

Accepted Answer

A) True 
 B)False

Question 6

The Budget Enforcement Act

Accepted Answer

A)  increased the gasoline tax by 10 cents per gallon 
B)  reduced taxes on upper income groups 
C)  created a "Paygo" provision in federal budgeting 
D)  did not reduce defense spending 
E)  increased itemized deductions for the wealthy 
A)  increased the gasoline tax by 10 cents per gallon 
B)  reduced taxes on upper income groups 
C)  created a "Paygo" provision in federal budgeting 
D)  did not reduce defense spending 
E)  increased itemized deductions for the wealthy

Question 7

_____________ is the rise in price of goods and services, even though the actual value of those goods and services does not increase.

Accepted Answer

A)  Recession 
B)  Depression 
C)  Inflation 
D)  Deregulation 
A)  Recession 
B)  Depression 
C)  Inflation 
D)  Deregulation

Question 8

The largest portion of federal spending is allocated to ____________.

Accepted Answer

A)  National defense 
B)  Education 
C)  Social Security 
D)  Medicare 
E)  Foreign Aid 
A)  National defense 
B)  Education 
C)  Social Security 
D)  Medicare 
E)  Foreign Aid

Question 9

When government expenditures exceed revenues, we have

Accepted Answer

A)  cost-push inflation 
B)  monetary policy 
C)  recession 
D)  deficit spending 
A)  cost-push inflation 
B)  monetary policy 
C)  recession 
D)  deficit spending

Question 10

According to economists ________ percent unemployment is an appropriate definition of full employment

Accepted Answer

A)  10 
B)  0 
C)  5 
D)  None of the above 
A)  10 
B)  0 
C)  5 
D)  None of the above

Question 11

All other things being equal, a tax increase is likely to:

Accepted Answer

A)  decrease inflation 
B)  increase inflation 
C)  cause the money supply to rise 
D)  cause the reserve requirement to decrease 
E)  encourage banks to loan more money 
A)  decrease inflation 
B)  increase inflation 
C)  cause the money supply to rise 
D)  cause the reserve requirement to decrease 
E)  encourage banks to loan more money

Question 12

Policy which encompasses government taxing and spending is:

Accepted Answer

A)  fiscal policy 
B)  monetary policy 
C)  antitrust policy 
D)  Federal Reserve Board policy 
A)  fiscal policy 
B)  monetary policy 
C)  antitrust policy 
D)  Federal Reserve Board policy

Question 13

Interest payments on the national debt became a major part of federal budgets during the 1980s.

Accepted Answer

A) True 
 B)False

Question 14

Tax reductions in the form of tax incentives can encourage corporations to

Accepted Answer

A)  hire more people 
B)  spend more money 
C)  save more money. 
D)  invest in plant expansion. 
A)  hire more people 
B)  spend more money 
C)  save more money. 
D)  invest in plant expansion.

Question 15

Troubled Asset Relief Program (TARP) was created in part in response to the practice of lending institutions having allowed individuals to borrow money for homes well beyond their ability to repay which resulted in an escalation of mortgage defaults.

Accepted Answer

A) True 
 B)False

Question 16

Traditional Keynesian fiscal and monetary policy focuses on the supply of goods and services.

Accepted Answer

A) True 
 B)False

Question 17

The Balanced Budget Act of 1997 and the performance of the economy in the 1990s produced the result that the federal budget deficit in the late 1990s

Accepted Answer

A)  rose rapidly 
B)  rose slowly 
C)  became a surplus 
D)  stayed about the same 
A)  rose rapidly 
B)  rose slowly 
C)  became a surplus 
D)  stayed about the same

Question 18

The strength of the dollar is a measure of the ability of the dollar to purchase foreign currency in international money. A strong dollar translates into

Accepted Answer

A)  increase costs of imported goods to consumers 
B)  makes it easier to sell goods abroad 
C)  decreases the costs of American goods exported to other countries 
D)  greater purchasing power for the American dollar 
E)  none of the above 
A)  increase costs of imported goods to consumers 
B)  makes it easier to sell goods abroad 
C)  decreases the costs of American goods exported to other countries 
D)  greater purchasing power for the American dollar 
E)  none of the above

Question 19

Which of the following is NOT a cause of inflation?

Accepted Answer

A)  increase in demand 
B)  increase in cost of production 
C)  increase in supply 
A)  increase in demand 
B)  increase in cost of production 
C)  increase in supply

Question 20

"Jawboning" refers to:

Accepted Answer

A)  town hall meetings held with congressional members 
B)  the administration attempt to persuade businesses and other groups to voluntarily comply with economic policy directives 
C)  Federal Reserve Board meetings 
D)  none of the above 
A)  town hall meetings held with congressional members 
B)  the administration attempt to persuade businesses and other groups to voluntarily comply with economic policy directives 
C)  Federal Reserve Board meetings 
D)  none of the above

Gramm-Rudman was effective in reducing the federal budget deficit only on paper.

The federal budget acts as a component of fiscal policy by

The use of monetary policy and fiscal policy are the federal government's two primary instruments of accomplishing macroeconomic goals and achieving economic stability.

The Tax Reform Act of 1986 was an effort to make the federal tax system fairer, simpler and more efficient. It retained many major deductions for itemizing except:

President Reagan administration's supply-side policies resulted in a 5 percent and 10 percent cuts in personal income taxes.

The Budget Enforcement Act

_____________ is the rise in price of goods and services, even though the actual value of those goods and services does not increase.

The largest portion of federal spending is allocated to ____________.

When government expenditures exceed revenues, we have

According to economists ________ percent unemployment is an appropriate definition of full employment

All other things being equal, a tax increase is likely to:

Policy which encompasses government taxing and spending is:

Interest payments on the national debt became a major part of federal budgets during the 1980s.

Tax reductions in the form of tax incentives can encourage corporations to

Troubled Asset Relief Program (TARP) was created in part in response to the practice of lending institutions having allowed individuals to borrow money for homes well beyond their ability to repay which resulted in an escalation of mortgage defaults.

Traditional Keynesian fiscal and monetary policy focuses on the supply of goods and services.

The Balanced Budget Act of 1997 and the performance of the economy in the 1990s produced the result that the federal budget deficit in the late 1990s

The strength of the dollar is a measure of the ability of the dollar to purchase foreign currency in international money. A strong dollar translates into

Which of the following is NOT a cause of inflation?

"Jawboning" refers to:

Public Policy: an Introduction

Contexts of Public Policy

The Economy: Changing Government-Business Relationships

Energy and Environmental Policies: Policy Instability

Crime and Criminal Justice: Dilemmas of Social Control

Poverty and Social Welfare Policy

Health Care: Historic Change

Education: Conflict in Policy Direction

Legal and Social Equality: the Struggle Against Oppression and Bigotry

Immigration Policy: the Barely Open Door

Foreign Defense Policy: Security and Interests in a Dangerous World

Private Morality and Public Policy: Moral Values, the Constitution, and the Open Society

Filters

Exam 4: Economic Issues: Taxing, Spending, and Budgeting

Gramm-Rudman was effective in reducing the federal budget deficit only on paper.

The federal budget acts as a component of fiscal policy by

The use of monetary policy and fiscal policy are the federal government's two primary instruments of accomplishing macroeconomic goals and achieving economic stability.

The Tax Reform Act of 1986 was an effort to make the federal tax system fairer, simpler and more efficient. It retained many major deductions for itemizing except:

President Reagan administration's supply-side policies resulted in a 5 percent and 10 percent cuts in personal income taxes.

The Budget Enforcement Act

_____________ is the rise in price of goods and services, even though the actual value of those goods and services does not increase.

The largest portion of federal spending is allocated to ____________.

When government expenditures exceed revenues, we have

According to economists ________ percent unemployment is an appropriate definition of full employment

All other things being equal, a tax increase is likely to:

Policy which encompasses government taxing and spending is:

Interest payments on the national debt became a major part of federal budgets during the 1980s.

Tax reductions in the form of tax incentives can encourage corporations to

Troubled Asset Relief Program (TARP) was created in part in response to the practice of lending institutions having allowed individuals to borrow money for homes well beyond their ability to repay which resulted in an escalation of mortgage defaults.

Traditional Keynesian fiscal and monetary policy focuses on the supply of goods and services.

The Balanced Budget Act of 1997 and the performance of the economy in the 1990s produced the result that the federal budget deficit in the late 1990s

The strength of the dollar is a measure of the ability of the dollar to purchase foreign currency in international money. A strong dollar translates into

Which of the following is NOT a cause of inflation?

"Jawboning" refers to:

Public Policy: an Introduction

Contexts of Public Policy

The Economy: Changing Government-Business Relationships

Energy and Environmental Policies: Policy Instability

Crime and Criminal Justice: Dilemmas of Social Control

Poverty and Social Welfare Policy

Health Care: Historic Change

Education: Conflict in Policy Direction

Legal and Social Equality: the Struggle Against Oppression and Bigotry

Immigration Policy: the Barely Open Door

Foreign Defense Policy: Security and Interests in a Dangerous World

Private Morality and Public Policy: Moral Values, the Constitution, and the Open Society

Filters