Question 1

Which of the following statements best characterizes the percentage of the federal budget that is spent on mandatory programs?

Accepted Answer

A)  Spending on mandatory programs increased between 1962 and 1990 but has decreased dramatically since 1990. 
B)  Spending on mandatory programs decreased between 1962 and 1990 but has increased dramatically since 1990. 
C)  Spending on mandatory programs has remained constant since 1970. 
D)  Spending on mandatory programs has grown dramatically since 1970. 
E)  Spending on mandatory programs has declined dramatically since 1970. 
A)  Spending on mandatory programs increased between 1962 and 1990 but has decreased dramatically since 1990. 
B)  Spending on mandatory programs decreased between 1962 and 1990 but has increased dramatically since 1990. 
C)  Spending on mandatory programs has remained constant since 1970. 
D)  Spending on mandatory programs has grown dramatically since 1970. 
E)  Spending on mandatory programs has declined dramatically since 1970.

Question 2

The United States has ______ percent of the world's population and is responsible for ______ percent of its greenhouse gas emissions.

Accepted Answer

A)  1; 5 
B)  10; 25 
C)  5; 45 
D)  20; 60 
E)  25; 10 
A)  1; 5 
B)  10; 25 
C)  5; 45 
D)  20; 60 
E)  25; 10

Question 3

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 4

In order to have reliable information about the costs and impact of economic policies, Congress created the ______.

Accepted Answer

A)  Federal Reserve Board 
B)  Office of Management and Budget 
C)  Congressional Budget Office 
D)  Congressional Oversight Commission 
E)  Congressional Research Service 
A)  Federal Reserve Board 
B)  Office of Management and Budget 
C)  Congressional Budget Office 
D)  Congressional Oversight Commission 
E)  Congressional Research Service

Question 5

Those who believe in ______ argue that the government's role in regulating the economy should be limited to regulating the supply of money.

Accepted Answer

A)  Keynesianism 
B)  monetarism 
C)  fiscalism 
D)  inflation 
E)  laissez-faire capitalism 
A)  Keynesianism 
B)  monetarism 
C)  fiscalism 
D)  inflation 
E)  laissez-faire capitalism

Question 6

Which U.S. president once said, "I am now a Keynesian"?

Accepted Answer

A)  Herbert Hoover 
B)  Richard Nixon 
C)  Ronald Reagan 
D)  George W. Bush 
E)  Franklin Roosevelt 
A)  Herbert Hoover 
B)  Richard Nixon 
C)  Ronald Reagan 
D)  George W. Bush 
E)  Franklin Roosevelt

Question 7

Public policy can be embodied in all of the following forms except

Accepted Answer

A)  a law. 
B)  an administrative rule. 
C)  an order. 
D)  regulation. 
E)  a petition. 
A)  a law. 
B)  an administrative rule. 
C)  an order. 
D)  regulation. 
E)  a petition.

Question 8

Which of the following is not a function of the Securities and Exchange Commission?

Accepted Answer

A)  It requires companies to disclose information about the stocks and bonds that they are selling. 
B)  It informs buyers of investment risks. 
C)  It protects the confidentiality of all sales of stocks and bonds. 
D)  It protects investors against fraud. 
E)  It helps the government promote reliable access to new investments through its regulation of financial markets. 
A)  It requires companies to disclose information about the stocks and bonds that they are selling. 
B)  It informs buyers of investment risks. 
C)  It protects the confidentiality of all sales of stocks and bonds. 
D)  It protects investors against fraud. 
E)  It helps the government promote reliable access to new investments through its regulation of financial markets.

Question 9

Upton Sinclair's 1906 exposé The Jungle revealed the

Accepted Answer

A)  widespread use of child labor in coal mines and factories throughout the United States. 
B)  violent suppression of labor unions by big business. 
C)  control of politicians by corporate interests who run the political machines. 
D)  unsanitary practices at meatpacking plants. 
E)  violent uprisings of union members across the United States. 
A)  widespread use of child labor in coal mines and factories throughout the United States. 
B)  violent suppression of labor unions by big business. 
C)  control of politicians by corporate interests who run the political machines. 
D)  unsanitary practices at meatpacking plants. 
E)  violent uprisings of union members across the United States.

Question 10

Which of the following statements about the United States budget deficit is most accurate?

Accepted Answer

A)  The federal deficit has decreased dramatically since 2000. 
B)  The federal budget showed a large surplus throughout the 1980s. 
C)  The federal budget deficit increased dramatically after 2001. 
D)  The federal budget has not shown a surplus since 1960. 
E)  The federal budget deficit was at its largest point in history in 1992. 
A)  The federal deficit has decreased dramatically since 2000. 
B)  The federal budget showed a large surplus throughout the 1980s. 
C)  The federal budget deficit increased dramatically after 2001. 
D)  The federal budget has not shown a surplus since 1960. 
E)  The federal budget deficit was at its largest point in history in 1992.

Question 11

Economic subsidies were first introduced in the United States during the 1930s.

Accepted Answer

A) True 
 B)False

Question 12

Sales taxes are ______, and most income taxes are ______.

Accepted Answer

A)  regressive; regressive 
B)  progressive; progressive 
C)  progressive; regressive 
D)  regressive; progressive 
E)  high; low 
A)  regressive; regressive 
B)  progressive; progressive 
C)  progressive; regressive 
D)  regressive; progressive 
E)  high; low

Question 13

There is wide disagreement about the degree to which government should be involved in the economy and for what reasons. Describe the three main competing theories about the proper role of government in the economy: laissez-faire, Keynesian, and monetarism. For each theory, explain what is perceived as the ideal role of government. What are some of the practical problems with each theory?

Accepted Answer

Laissez-faire, Keynesian, and monetarism

Question 14

Why did the Democrats believe that the 2001 tax cuts should only remain permanent for those making less than $250,000 a year?

Accepted Answer

A)  High-income earners (those making more than $250,000 a year) had benefited disproportionately from economic growth in the early 2000s. 
B)  The original tax cuts for those making more than $250,000 a year were overwhelmingly unpopular with the American public. 
C)  Most Democratic members of Congress make less than $250,000 a year. 
D)  Tax cuts for the wealthy stimulate the economy. 
E)  The original 2001 tax cut legislation stipulated that after ten years the tax cuts for those making over $250,000 a year would be repealed. 
A)  High-income earners (those making more than $250,000 a year) had benefited disproportionately from economic growth in the early 2000s. 
B)  The original tax cuts for those making more than $250,000 a year were overwhelmingly unpopular with the American public. 
C)  Most Democratic members of Congress make less than $250,000 a year. 
D)  Tax cuts for the wealthy stimulate the economy. 
E)  The original 2001 tax cut legislation stipulated that after ten years the tax cuts for those making over $250,000 a year would be repealed.

Question 15

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

Accepted Answer

A)  They can be treated as "benefits" that can be spread widely 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. 
E)  They are paid for through international tariffs rather than personal income taxes. 
A)  They can be treated as "benefits" that can be spread widely 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. 
E)  They are paid for through international tariffs rather than personal income taxes.

Question 16

Which of the following was not one of the goals of the American Recovery and Reinvestment Act of 2009?

Accepted Answer

A)  encourage economic growth 
B)  develop weatherization projects and clean technology construction 
C)  save existing jobs that might be lost due to the economic recession 
D)  provide for a national health care system 
E)  make longer-term investments to encourage job creation 
A)  encourage economic growth 
B)  develop weatherization projects and clean technology construction 
C)  save existing jobs that might be lost due to the economic recession 
D)  provide for a national health care system 
E)  make longer-term investments to encourage job creation

Question 17

When people in the lower income brackets pay a larger percentage of their income toward a tax, it is called ______ taxation.

Accepted Answer

A)  progressive 
B)  regressive 
C)  inflationary 
D)  redistributive 
E)  distributive 
A)  progressive 
B)  regressive 
C)  inflationary 
D)  redistributive 
E)  distributive

Question 18

Which of the Founders was most responsible for establishment of the Bank of the United States?

Accepted Answer

A)  Thomas Jefferson 
B)  James Madison 
C)  John Adams 
D)  Alexander Hamilton 
E)  Benjamin Franklin 
A)  Thomas Jefferson 
B)  James Madison 
C)  John Adams 
D)  Alexander Hamilton 
E)  Benjamin Franklin

Question 19

Which statement is the key argument of John Maynard Keynes?

Accepted Answer

A)  Government can pull an economy out of a recession by stimulating demand and creating a cycle of increased production and jobs. 
B)  Government regulations during economic depressions must be lifted because they destroy the already slim profit margin. 
C)  The economy of size shows that monopolies are the most efficient way to distribute goods throughout a national marketplace. 
D)  A well-functioning economy need never experience an economic downturn. 
E)  Government can rectify a falling economy by regulating the money supply. 
A)  Government can pull an economy out of a recession by stimulating demand and creating a cycle of increased production and jobs. 
B)  Government regulations during economic depressions must be lifted because they destroy the already slim profit margin. 
C)  The economy of size shows that monopolies are the most efficient way to distribute goods throughout a national marketplace. 
D)  A well-functioning economy need never experience an economic downturn. 
E)  Government can rectify a falling economy by regulating the money supply.

Question 20

It would be nearly impossible for the marketplace to run efficiently without some government involvement. Describe some of the different roles that the government plays in the economy. Why is some level of governmental involvement always needed in the economy?

Accepted Answer

Government involvement in the economy is

Exam 16: Government and the Economy

Which of the following statements best characterizes the percentage of the federal budget that is spent on mandatory programs?

The United States has ______ percent of the world's population and is responsible for ______ percent of its greenhouse gas emissions.

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

In order to have reliable information about the costs and impact of economic policies, Congress created the ______.

Those who believe in ______ argue that the government's role in regulating the economy should be limited to regulating the supply of money.

Which U.S. president once said, "I am now a Keynesian"?

Public policy can be embodied in all of the following forms except

Which of the following is not a function of the Securities and Exchange Commission?

Upton Sinclair's 1906 exposé The Jungle revealed the

Which of the following statements about the United States budget deficit is most accurate?

Economic subsidies were first introduced in the United States during the 1930s.

Sales taxes are ______, and most income taxes are ______.

Why did the Democrats believe that the 2001 tax cuts should only remain permanent for those making less than $250,000 a year?

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

Which of the following was not one of the goals of the American Recovery and Reinvestment Act of 2009?

When people in the lower income brackets pay a larger percentage of their income toward a tax, it is called ______ taxation.

Which of the Founders was most responsible for establishment of the Bank of the United States?

Which statement is the key argument of John Maynard Keynes?

It would be nearly impossible for the marketplace to run efficiently without some government involvement. Describe some of the different roles that the government plays in the economy. Why is some level of governmental involvement always needed in the economy?

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The United States has percent of the world's population and is responsible for percent of its greenhouse gas emissions.

Sales taxes are , and most income taxes are .