Question 1

Which of the following statements about the relationship between government and capitalism is FALSE?

Accepted Answer

A)  Government makes it possible for markets to function efficiently. 
B)  Government rule making means that people no longer need to rely on personal trust when conducting business. 
C)  Before the Progressive era, the marketplace was untouched by government interference. 
D)  Markets break down in nations that have weak governments. 
E)  There is much disagreement among the public and politicians over the extent of the role the government should play in the economy. 
A)  Government makes it possible for markets to function efficiently. 
B)  Government rule making means that people no longer need to rely on personal trust when conducting business. 
C)  Before the Progressive era, the marketplace was untouched by government interference. 
D)  Markets break down in nations that have weak governments. 
E)  There is much disagreement among the public and politicians over the extent of the role the government should play in the economy.

Question 2

Why do many businesses prefer Congress to regulate the economy?

Accepted Answer

A)  Regulations are more cost-effective in the long run. 
B)  One national regulation is better than the inconsistencies and disparities of different state laws. 
C)  Businesses argue that regulations help to increase their market share. 
D)  Regulations lead to a fairer and more equitable marketplace. 
E)  Regulations help businesses net more profit. 
A)  Regulations are more cost-effective in the long run. 
B)  One national regulation is better than the inconsistencies and disparities of different state laws. 
C)  Businesses argue that regulations help to increase their market share. 
D)  Regulations lead to a fairer and more equitable marketplace. 
E)  Regulations help businesses net more profit.

Question 3

________ occurs when the price level of goods and services increases over several months.

Accepted Answer

A)  Monetarism 
B)  A budget deficit 
C)  An open-market operation 
D)  Inflation 
E)  A recession 
A)  Monetarism 
B)  A budget deficit 
C)  An open-market operation 
D)  Inflation 
E)  A recession

Question 4

What event marked the major historical turning point in the relationship between the government and the marketplace?

Accepted Answer

A)  the Civil War 
B)  the Depression of 1896 
C)  the Great Depression 
D)  World War II 
E)  the implementation of Reaganomics 
A)  the Civil War 
B)  the Depression of 1896 
C)  the Great Depression 
D)  World War II 
E)  the implementation of Reaganomics

Question 5

Which of the following was a driving force for economic growth during the late nineteenth century?

Accepted Answer

A)  agriculture 
B)  war 
C)  manufacturing industries 
D)  government work projects 
E)  international trade 
A)  agriculture 
B)  war 
C)  manufacturing industries 
D)  government work projects 
E)  international trade

Question 6

Vehicle safety is one of the chief responsibilities of the Department of ________.

Accepted Answer

A)  Transportation 
B)  Consumer Safety 
C)  Commerce 
D)  the Interior 
E)  Health and Human Services 
A)  Transportation 
B)  Consumer Safety 
C)  Commerce 
D)  the Interior 
E)  Health and Human Services

Question 7

Explain the different goals of economic policy. How have some of these goals changed over the course of American history? Why do economic policy goals often conflict with each other? Provide an illustration.

Accepted Answer

Economic policy aims to achieve various

Question 8

Green technologies may prove to be a boon for the American economy because

Accepted Answer

A)  the United States has already signed trade agreements with numerous countries to export green technologies. 
B)  the United Nations has passed a resolution asserting that only the United States will be allowed to produce green technologies for the next 10 years. 
C)  the profit margins on green technologies are much higher than those of more traditional products. 
D)  many countries around the world have decided to use only energy-efficient products. 
E)  America's highly skilled labor force provides it with a competitive advantage over many other countries. 
A)  the United States has already signed trade agreements with numerous countries to export green technologies. 
B)  the United Nations has passed a resolution asserting that only the United States will be allowed to produce green technologies for the next 10 years. 
C)  the profit margins on green technologies are much higher than those of more traditional products. 
D)  many countries around the world have decided to use only energy-efficient products. 
E)  America's highly skilled labor force provides it with a competitive advantage over many other countries.

Question 9

Approximately ________ percent of the federal budget is in the mandatory spending category.

Accepted Answer

A)  25 
B)  33 
C)  50 
D)  65 
E)  90 
A)  25 
B)  33 
C)  50 
D)  65 
E)  90

Question 10

The index of the total output of goods and services produced in a national economy is called the ________.

Accepted Answer

A)  federal funds rate 
B)  inflation index 
C)  gross domestic product 
D)  monetary fund 
E)  consumer price index 
A)  federal funds rate 
B)  inflation index 
C)  gross domestic product 
D)  monetary fund 
E)  consumer price index

Question 11

The federal government's role in providing electricity to rural areas is an example of the fact that

Accepted Answer

A)  government often supplies public goods that are too big or risky for private actors to address. 
B)  private businesses are always more efficient at providing public goods and services than government actors. 
C)  government never gives up control of an industry once it has started to regulate it. 
D)  state governments are not allowed under the Constitution to engage in any activity related to the provision of public goods. 
E)  the federal government has rarely undertaken projects to produce public goods. 
A)  government often supplies public goods that are too big or risky for private actors to address. 
B)  private businesses are always more efficient at providing public goods and services than government actors. 
C)  government never gives up control of an industry once it has started to regulate it. 
D)  state governments are not allowed under the Constitution to engage in any activity related to the provision of public goods. 
E)  the federal government has rarely undertaken projects to produce public goods.

Question 12

Which of the following is the best example of a public good?

Accepted Answer

A)  a computer 
B)  the interstate highway system 
C)  the airline industry 
D)  Wall Street 
E)  an iPhone 
A)  a computer 
B)  the interstate highway system 
C)  the airline industry 
D)  Wall Street 
E)  an iPhone

Question 13

The goal of the Works Progress Administration was to

Accepted Answer

A)  put unemployed people to work on public projects. 
B)  establish federal standards for hiring, firing, and laying off employees. 
C)  begin the nationalization of the American labor force. 
D)  help distribute food and aid to unemployed workers. 
E)  require companies to hire laid-off workers who had been out of work for six months or more. 
A)  put unemployed people to work on public projects. 
B)  establish federal standards for hiring, firing, and laying off employees. 
C)  begin the nationalization of the American labor force. 
D)  help distribute food and aid to unemployed workers. 
E)  require companies to hire laid-off workers who had been out of work for six months or more.

Question 14

________ taxation occurs when people in lower income brackets pay a larger percentage of their income in taxes.

Accepted Answer

A)  Progressive 
B)  Regressive 
C)  Inflationary 
D)  Redistributive 
E)  Distributive 
A)  Progressive 
B)  Regressive 
C)  Inflationary 
D)  Redistributive 
E)  Distributive

Question 15

Adam Smith's theory of ________ maintains that many individual economic transactions come together to create a greater good for all.

Accepted Answer

A)  rational expectations 
B)  the prisoner's dilemma 
C)  the invisible hand 
D)  trickle-down economics 
E)  collective action 
A)  rational expectations 
B)  the prisoner's dilemma 
C)  the invisible hand 
D)  trickle-down economics 
E)  collective action

Question 16

Something that must be supplied by the government because it cannot be provided by the marketplace is called ________.

Accepted Answer

A)  a public good 
B)  a commodity 
C)  a governmental appropriation 
D)  pork 
E)  the public option 
A)  a public good 
B)  a commodity 
C)  a governmental appropriation 
D)  pork 
E)  the public option

Question 17

Which of the following has NOT been a fundamental goal of the government's involvement in the economy?

Accepted Answer

A)  promoting equality for all citizens 
B)  promoting economic stability 
C)  encouraging business development 
D)  stimulating economic growth 
E)  protecting employees and consumers 
A)  promoting equality for all citizens 
B)  promoting economic stability 
C)  encouraging business development 
D)  stimulating economic growth 
E)  protecting employees and consumers

Question 18

Which of the following actions marked a decisive break with the tradition of the federal government promoting compromises between labor and management?

Accepted Answer

A)  When President Ronald Reagan fired striking air traffic controllers and hired permanent replacements to fill their jobs in 1981. 
B)  When President Reagan sent in the National Guard to break up picketing in front of major defense contractors in 1985. 
C)  When Congress passed and George H. W. Bush signed legislation dismantling the National Labor Relations Board in 1992. 
D)  When Congress passed and Bill Clinton signed legislation permitting companies to shut down without giving their employees advance notification in 1994. 
E)  When the National Labor Relations Act set up a framework for labor relations in 1935. 
A)  When President Ronald Reagan fired striking air traffic controllers and hired permanent replacements to fill their jobs in 1981. 
B)  When President Reagan sent in the National Guard to break up picketing in front of major defense contractors in 1985. 
C)  When Congress passed and George H. W. Bush signed legislation dismantling the National Labor Relations Board in 1992. 
D)  When Congress passed and Bill Clinton signed legislation permitting companies to shut down without giving their employees advance notification in 1994. 
E)  When the National Labor Relations Act set up a framework for labor relations in 1935.

Question 19

Those who believe in the theory of ________ maintain that the government's role in regulating the economy should be focused on lowering taxes and creating incentives for a more productive and efficient use of resources.

Accepted Answer

A)  Keynesianism 
B)  supply-side economics 
C)  fiscalism 
D)  inflation 
E)  laissez-faire capitalism 
A)  Keynesianism 
B)  supply-side economics 
C)  fiscalism 
D)  inflation 
E)  laissez-faire capitalism

Question 20

An officially expressed purpose or goal backed by a sanction is a ________.

Accepted Answer

A)  public policy 
B)  regulation 
C)  rule 
D)  bill 
E)  reward 
A)  public policy 
B)  regulation 
C)  rule 
D)  bill 
E)  reward

Which of the following statements about the relationship between government and capitalism is FALSE?

Why do many businesses prefer Congress to regulate the economy?

________ occurs when the price level of goods and services increases over several months.

What event marked the major historical turning point in the relationship between the government and the marketplace?

Which of the following was a driving force for economic growth during the late nineteenth century?

Vehicle safety is one of the chief responsibilities of the Department of ________.

Explain the different goals of economic policy. How have some of these goals changed over the course of American history? Why do economic policy goals often conflict with each other? Provide an illustration.

Green technologies may prove to be a boon for the American economy because

Approximately ________ percent of the federal budget is in the mandatory spending category.

The index of the total output of goods and services produced in a national economy is called the ________.

The federal government's role in providing electricity to rural areas is an example of the fact that

Which of the following is the best example of a public good?

The goal of the Works Progress Administration was to

________ taxation occurs when people in lower income brackets pay a larger percentage of their income in taxes.

Adam Smith's theory of ________ maintains that many individual economic transactions come together to create a greater good for all.

Something that must be supplied by the government because it cannot be provided by the marketplace is called ________.

Which of the following has NOT been a fundamental goal of the government's involvement in the economy?

Which of the following actions marked a decisive break with the tradition of the federal government promoting compromises between labor and management?

Those who believe in the theory of ________ maintain that the government's role in regulating the economy should be focused on lowering taxes and creating incentives for a more productive and efficient use of resources.

An officially expressed purpose or goal backed by a sanction is a ________.

American Political Culture

The Founding and the Constitution

Federalism

Civil Liberties

Civil Rights

Public Opinion

The Media

Political Participation and Voting

Political Parties

Campaigns and Elections

Groups and Interests

Congress

The Presidency

Bureaucracy in a Democracy

The Federal Courts

Social Policy

Foreign Policy and Democracy

Filters

Exam 16: Government and the Economy

Which of the following statements about the relationship between government and capitalism is FALSE?

Why do many businesses prefer Congress to regulate the economy?

________ occurs when the price level of goods and services increases over several months.

What event marked the major historical turning point in the relationship between the government and the marketplace?

Which of the following was a driving force for economic growth during the late nineteenth century?

Vehicle safety is one of the chief responsibilities of the Department of ________.

Explain the different goals of economic policy. How have some of these goals changed over the course of American history? Why do economic policy goals often conflict with each other? Provide an illustration.

Green technologies may prove to be a boon for the American economy because

Approximately ________ percent of the federal budget is in the mandatory spending category.

The index of the total output of goods and services produced in a national economy is called the ________.

The federal government's role in providing electricity to rural areas is an example of the fact that

Which of the following is the best example of a public good?

The goal of the Works Progress Administration was to

________ taxation occurs when people in lower income brackets pay a larger percentage of their income in taxes.

Adam Smith's theory of ________ maintains that many individual economic transactions come together to create a greater good for all.

Something that must be supplied by the government because it cannot be provided by the marketplace is called ________.

Which of the following has NOT been a fundamental goal of the government's involvement in the economy?

Which of the following actions marked a decisive break with the tradition of the federal government promoting compromises between labor and management?

Those who believe in the theory of ________ maintain that the government's role in regulating the economy should be focused on lowering taxes and creating incentives for a more productive and efficient use of resources.

An officially expressed purpose or goal backed by a sanction is a ________.

American Political Culture

The Founding and the Constitution

Federalism

Civil Liberties

Civil Rights

Public Opinion

The Media

Political Participation and Voting

Political Parties

Campaigns and Elections

Groups and Interests

Congress

The Presidency

Bureaucracy in a Democracy

The Federal Courts

Social Policy

Foreign Policy and Democracy

Filters