Question 1

A tax designed to reduce the disparities in wealth between the rich and poor is called a(n)

Accepted Answer

A) entitlement program. 
B) tariff. 
C) regressive tax policy. 
D) policy of redistribution. 
A) entitlement program. 
B) tariff. 
C) regressive tax policy. 
D) policy of redistribution.

Question 2

The MOST consistently powerful nongovernment actors in determining economic policy are

Accepted Answer

A) labor unions. 
B) environmental groups. 
C) business organizations. 
D) foreign nations. 
A) labor unions. 
B) environmental groups. 
C) business organizations. 
D) foreign nations.

Question 3

Why have politicians always favored using subsidies to promote certain economic activities?

Accepted Answer

A) They can be treated as benefits that can be widely spread in response to many demands. 
B) They are generally cheaper than other forms of government support. 
C) Recipients are always required to pay back the subsidies. 
D) Congress does not have to pass legislation in order to provide subsidies. 
A) They can be treated as benefits that can be widely spread in response to many demands. 
B) They are generally cheaper than other forms of government support. 
C) Recipients are always required to pay back the subsidies. 
D) Congress does not have to pass legislation in order to provide subsidies.

Question 4

Which of the following has been a fundamental goal of the government's involvement in the economy?

Accepted Answer

A) promoting economic equality 
B) encouraging investment in businesses abroad 
C) stimulating economic growth 
D) reducing imports from foreign economies 
A) promoting economic equality 
B) encouraging investment in businesses abroad 
C) stimulating economic growth 
D) reducing imports from foreign economies

Question 5

The 1969 National Environmental Policy Act (NEPA) was significant because it

Accepted Answer

A) allocated nearly $30 billion to support alternative energy technology investment and to improve energy efficiency. 
B) instituted a cap-and-trade system for reducing carbon emissions. 
C) raised the fuel economy standards for new vehicles to 35.5 miles per gallon. 
D) required federal agencies to prepare an environmental impact statement for every major development project they propose. 
A) allocated nearly $30 billion to support alternative energy technology investment and to improve energy efficiency. 
B) instituted a cap-and-trade system for reducing carbon emissions. 
C) raised the fuel economy standards for new vehicles to 35.5 miles per gallon. 
D) required federal agencies to prepare an environmental impact statement for every major development project they propose.

Question 6

The fact that a bottle of Coca Cola cost $0.05 in 1959 and $1.50 today is an example of

Accepted Answer

A) opportunity costs. 
B) indexing. 
C) deflation. 
D) inflation. 
A) opportunity costs. 
B) indexing. 
C) deflation. 
D) inflation.

Question 7

Classic laissez-faire theory is based on the idea that

Accepted Answer

A) government monopolies stimulate economic growth. 
B) self-interest does nothing to promote the public good. 
C) a truly efficient government allows private enterprise to provide all government services. 
D) economic competition unleashes growth and innovation. 
A) government monopolies stimulate economic growth. 
B) self-interest does nothing to promote the public good. 
C) a truly efficient government allows private enterprise to provide all government services. 
D) economic competition unleashes growth and innovation.

Question 8

Beginning in the late 1950s, the federal government

Accepted Answer

A) refused to pay any of the costs associated with highway construction. 
B) began paying for 100 percent of highway construction costs. 
C) agreed to pay 10 percent of highway construction costs on the condition that each state provide 90 percent of the costs of any portion of a highway built within its boundaries. 
D) agreed to pay 90 percent of highway construction costs on the condition that each state provide 10 percent of the costs of any portion of a highway built within its boundaries. 
A) refused to pay any of the costs associated with highway construction. 
B) began paying for 100 percent of highway construction costs. 
C) agreed to pay 10 percent of highway construction costs on the condition that each state provide 90 percent of the costs of any portion of a highway built within its boundaries. 
D) agreed to pay 90 percent of highway construction costs on the condition that each state provide 10 percent of the costs of any portion of a highway built within its boundaries.

Question 9

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

Accepted Answer

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

Question 10

Which president warned the nation to beware of the powerful "military-industrial complex" as he was leaving office?

Accepted Answer

A) Washington 
B) Eisenhower 
C) Nixon 
D) Reagan 
A) Washington 
B) Eisenhower 
C) Nixon 
D) Reagan

Question 11

During the nineteenth century, the federal government received MOST of its revenue from

Accepted Answer

A) corporate taxes. 
B) personal income taxes. 
C) social insurance taxes. 
D) tariffs. 
A) corporate taxes. 
B) personal income taxes. 
C) social insurance taxes. 
D) tariffs.

Question 12

The federal minimum wage is

Accepted Answer

A) the highest minimum wage that can legally be paid in the country, and state and local governments are not allowed to pass laws requiring higher levels of hourly compensation. 
B) lower than the minimum wage currently required in two states, California and Washington. 
C) lower than the minimum wage currently required in 29 states. 
D) lower than the minimum wage currently required in all 50 states. 
A) the highest minimum wage that can legally be paid in the country, and state and local governments are not allowed to pass laws requiring higher levels of hourly compensation. 
B) lower than the minimum wage currently required in two states, California and Washington. 
C) lower than the minimum wage currently required in 29 states. 
D) lower than the minimum wage currently required in all 50 states.

Question 13

Which of the following are the three basic prerequisites for economic growth?

Accepted Answer

A) domestic investment, foreign investment, and government regulation 
B) foreign investment, productive workforce, and economic regulation 
C) public investment, government investment, and financial stability 
D) public investment, innovation, and a productive workforce 
A) domestic investment, foreign investment, and government regulation 
B) foreign investment, productive workforce, and economic regulation 
C) public investment, government investment, and financial stability 
D) public investment, innovation, and a productive workforce

Question 14

The federal government's relationship with Sematech illustrates that

Accepted Answer

A) expensive government bailouts of private companies often increase the national debt by a large amount. 
B) partnerships between the federal government and private industry never succeed in saving vulnerable sectors of the economy. 
C) government policies promoting private industry can successfully protect and develop vulnerable sectors of the economy. 
D) private companies often fail, despite receiving considerable financial support from federal grants and tax breaks. 
A) expensive government bailouts of private companies often increase the national debt by a large amount. 
B) partnerships between the federal government and private industry never succeed in saving vulnerable sectors of the economy. 
C) government policies promoting private industry can successfully protect and develop vulnerable sectors of the economy. 
D) private companies often fail, despite receiving considerable financial support from federal grants and tax breaks.

Question 15

A tax of $30 levied on every pound of cheese imported from France would be an example of a

Accepted Answer

A) tax expenditure. 
B) capital gains tax. 
C) value-added tax. 
D) tariff. 
A) tax expenditure. 
B) capital gains tax. 
C) value-added tax. 
D) tariff.

Question 16

________ policies are designed to eliminate the abuses of powerful ________.

Accepted Answer

A) Redistributive; tariffs 
B) Fiscal; loopholes 
C) Antitrust; monopolies 
D) Monetary; interest groups 
A) Redistributive; tariffs 
B) Fiscal; loopholes 
C) Antitrust; monopolies 
D) Monetary; interest groups

Question 17

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

Question 18

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 
A) rational expectations 
B) the Prisoner's Dilemma 
C) the invisible hand 
D) trickle-down economics

Question 19

The Budget Control Act of 2011 purported to

Accepted Answer

A) reduce the deficit by $1 trillion over 10 years. 
B) balance the budget in the short term. 
C) start paying off the total national debt. 
D) dramatically reduce social spending. 
A) reduce the deficit by $1 trillion over 10 years. 
B) balance the budget in the short term. 
C) start paying off the total national debt. 
D) dramatically reduce social spending.

Question 20

A ________ is an incentive in the tax code for individuals and corporations to invest their money in ways that government officials desire in exchange for a reduction in tax liabilities.

Accepted Answer

A) categorical grant 
B) loophole 
C) block grant 
D) subsidy 
A) categorical grant 
B) loophole 
C) block grant 
D) subsidy

A tax designed to reduce the disparities in wealth between the rich and poor is called a(n)

The MOST consistently powerful nongovernment actors in determining economic policy are

Why have politicians always favored using subsidies to promote certain economic activities?

Which of the following has been a fundamental goal of the government's involvement in the economy?

The 1969 National Environmental Policy Act (NEPA) was significant because it

The fact that a bottle of Coca Cola cost $0.05 in 1959 and $1.50 today is an example of

Classic laissez-faire theory is based on the idea that

Beginning in the late 1950s, the federal government

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

Which president warned the nation to beware of the powerful "military-industrial complex" as he was leaving office?

During the nineteenth century, the federal government received MOST of its revenue from

The federal minimum wage is

Which of the following are the three basic prerequisites for economic growth?

The federal government's relationship with Sematech illustrates that

A tax of $30 levied on every pound of cheese imported from France would be an example of a

policies are designed to eliminate the abuses of powerful .

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

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

The Budget Control Act of 2011 purported to

A ________ is an incentive in the tax code for individuals and corporations to invest their money in ways that government officials desire in exchange for a reduction in tax liabilities.

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

A tax designed to reduce the disparities in wealth between the rich and poor is called a(n)

The MOST consistently powerful nongovernment actors in determining economic policy are

Why have politicians always favored using subsidies to promote certain economic activities?

Which of the following has been a fundamental goal of the government's involvement in the economy?

The 1969 National Environmental Policy Act (NEPA) was significant because it

The fact that a bottle of Coca Cola cost $0.05 in 1959 and $1.50 today is an example of

Classic laissez-faire theory is based on the idea that

Beginning in the late 1950s, the federal government

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

Which president warned the nation to beware of the powerful "military-industrial complex" as he was leaving office?

During the nineteenth century, the federal government received MOST of its revenue from

The federal minimum wage is

Which of the following are the three basic prerequisites for economic growth?

The federal government's relationship with Sematech illustrates that

A tax of $30 levied on every pound of cheese imported from France would be an example of a

________ policies are designed to eliminate the abuses of powerful ________.

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

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

The Budget Control Act of 2011 purported to

A ________ is an incentive in the tax code for individuals and corporations to invest their money in ways that government officials desire in exchange for a reduction in tax liabilities.

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

policies are designed to eliminate the abuses of powerful .