Test Answers on Chapter 16 Questions – Flashcards

The most important tool the government has for directing the economy is: a. its control over trade policy b. its control over government subsidies c. its control over labor laws d. its control over the money supplies e. its control over investment practices

Keynesian economic theory has a central idea that the: a. government should not interfere with business practices b. government should decentralize economic policymaking c. government should take an activist role in managing the economy d. government should manage interest rates in economic policymaking e. government should erect trade barriers to protect the economy

Which of the following is characterized as an entitlement program? a. Medicaid b. Medicare c. Supplemental Security Income d. Children's Health Insurance Program e. food stamps

Among which of the following groups is poverty most common? a. unmarried women with children b. inner-city residents c. African Americans d. children e. older Americans

True or False: Changes in income distribution in the United States over the past few decades have led to an increased sense of relative deprivation among U.S. citizens

Which of the following is NOT true about welfare reform legislation passed in 1996 and its consequences? a. benefits for the poor have declined b. the number of families receiving aid has declined c. the role of state governments in welfare has declined d. the number of years for which families are eligible for benefits has declined e. the amount of money spent on welfare benefits has declined

True or False: The government spends more money on transfer payments for the poor than on transfer payments for other citizens.

Which of the following is the major reason why the future of the Social Security Trust Fund is thought to be in financial trouble? a. social security taxes have been cut b. The majority of Americans oppose the program c. the ratio of retired beneficiaries to contributing workers has declined d. Congress has no control over the Social Security program e. none of the above

Which aspect of social welfare spending is the United States less generous with than most European nations? a. health care b. child care c. unemployment compensation d. maintaining living standards for the elderly e. all of the above

True or False: Americans are more likely than Europeans to believe that the poor can escape poverty if they work hard enough.

Which of the following statements is an accurate characterization of economic policymaking approaches? a. liberals focus more on the imperfections of the market than imperfections of government b. liberals believe government spending is often the key to creating new jobs c. Conservatives focus more on the imperfections of government than imperfections of the market d. conservatives believe that the best way to create more jobs is often through less government regulation of business e. all of the above

What is the most important tool the government has for directing the economy? a. control over government subsidies b. control over government practices c. control over labor laws d. control over the money supply e. control over trade policy

Which of the following economic indicators would be most likely to have a significant effect on voting during an election year? a. the unemployment rate b. income equality between the classes c. the wage gap between men and women d. the federal reserve's discount rate for banks e. the consumer price index (CPI)

What distinguishes Keynesian economic theory from supply-side economics? a. regulation of the money supply b. the appropriate actions of the Federal Reserve Board c. the appropriate scope of the government d. the balance of economic power between Congress and the president e. whether to use fiscal policy at all

Which of the following is characterized as an entitlement program? a. Children's Health Insurance Program b. food stamps c. Medicaid d. Medicare e. Supplemental Security Income

A fiscally conservative political candidate is most likely to oppose which of the following? a. cutting back environmental regulations that increase the costs of running a business b. increasing funding for means-tested programs such as food stamps or welfare c. increasing military spending to fund projects in their own state d. increasing tax deductions for large corporations e. paying Social Security benefits to retirees

Among which of the following groups is poverty most common? a. Asian Americans b. children c. inner-city residents d. older Americans e. unmarried women with children

Which of the following statements accurately describe sales taxes? a. Sales tax is progressive because the tax is higher on higher-income people. b. Sales tax is proportional, because it takes a greater percentage from the rich. c. Sales tax is proportional, because it takes the same percentage from the rich and poor alike. d. Sales tax is regressive, because the poor spend more of their incomes on purchases. e. Sales tax is regressive, because the tax is higher on lower-income people.

Why are conservatives more likely to support the Earned Income Tax Credit than other social welfare policies? a. It has time limits. b. It has entitlement. c. It is means-tested. d. Only the unemployed benefit from it. e. Only those who work can benefit from it.

Which of the following is one reason the Personal Responsibility and Work Opportunity Reconciliation Act has failed to affect welfare's opportunity? a. It encourages racist attitudes towards minorities. b. It fails to curb the advance of poverty. c. It is seen as contributing to increased immigration. d. It is seen as encouraging people to remain poor. e. It makes poverty worse, rather than assisting the poor.

A major study by conservative economist Charles Murray argued that the social programs of Johnson's War on Poverty ____. a. did not eliminate poverty and it did reduce the number of poor b. did not help the poor enough c. enabled the poor to solve their own problems d. failed to curb the advance of poverty and actually made the situation worse e. were able to reduce poverty in America, but had no effect on racial discrimination

What do opponents of privatizing Social Security argue? a. that losses in the stock market could spell disaster for retirement funds b. that private accounts are more susceptible to inflation c. that private accounts may outpace current benefits d. that privatization puts citizens in charge of their own retirement e. that privatization would automatically shift the retirement age

The most important ratio for Social Security is that of _____. a. beneficiaries to tax rates b. contributions to the number of contributors c. contributions to workers d. tax rates to workers e. workers to beneficiaries

What is the fundamental difference between how Americans and Europeans see poverty and social welfare? a. American government is more generous with social welfare programs. b. American unemployment rates are considerably higher. c. Americans have a more positive attitude toward government. d. Americans see them as individual concerns. e. Americans see them as the responsibility of government.

The solutions to many problems of free enterprise were archived through the democratic process in America. From which of the following did political pressure on these issues grow? a. action to restrict unfair business practices b. the demands of the middle class seeking fair taxes c. the desire for shorter work days d. the need for tax reform e. the work of special interest groups

What is the key difference between liberal and conservative approaches to job creation? a. Liberals advocate a Keynesian approach, while conservatives advocate laissez-faire. b. Liberals are more concerned with unemployment than conservatives. c. Liberals argue for government-created jobs and conservatives for business-created jobs. d. Liberals argue for more blue-collared jobs and conservatives for more white-collar jobs. e. Liberals argue to raise the minimum wage, while conservatives argue that will stop job creation.