question

When the government's goals are embodied in a law or an order, backed by punishments or rewards, it is best described as:

answer

public policy.

question

What is the most important way the government affects personal and corporate investments?

answer

promoting investor confidence through policies enforcing stability and regard for the law

question

Which of the following is not a goal of governmental intervention in the economy?

answer

promoting corporate accountability

question

The Securities and Exchange Commission was established:

answer

after the stock market crash of 1929.

question

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

answer

It protects the confidentiality of all sales of stocks and bonds.

question

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

answer

public investment, innovation, strong workforce

question

The goal of the Works Progress Administration (WPA) was to:

answer

put unemployed persons to work on public projects.

question

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

answer

The Great Depression

question

What did the Great Depression and World War II do the the public's expectations regarding employment?

answer

They showed that the government can help to ensure full employment.

question

When the price level of goods and services increases over several months, it is called:

answer

inflation

question

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

answer

providing for a national health care system

question

Public policy an be embodied in all of the following forms except:

answer

a petition.

question

All of the following are strategies to combat inflation except:

answer

increasing the amount of government spending on public works projects.

question

_____ are given to states and local governments on condition that all expenditures are limited to the problem or group specified by law.

answer

Categorical grants

question

Which of the following is not a way in which the government promotes business development?

answer

regulations

question

Which of the following was not a major form of economic promotion by the federal government in the 19th century?

answer

public works projects

question

Which of the following does the Small Business Administration (SBA) provide?

answer

disaster assistance

question

Before the 1930s, relations between labor and management in the United States were:

answer

among the most violent in the world.

question

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

answer

Transportation.

question

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

answer

In 1981, Ronald Reagan fired striking air traffic controllers and hired permanent replacements to fill their jobs.

question

Upton Sinclair's 1906 expose The Jungle revealed:

answer

the unsanitary practices at meatpacking plants.

question

During the 1960s, Ralph Nader was influential as:

answer

a consumer advocate.

question

Which of the following has not been a major goal of the government's involvement in the economy?

answer

promoting economic equity and fairness for all citizens.

question

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

answer

the invisible hand

question

Classic laissez-faire theory argues all of the following except that:

answer

A truly efficient government allows private enterprise to provide all government services.

question

Which of the following is the most important economic value for supporters of laissez-faire?

answer

effiency

question

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

answer

Richard Nixon

question

What economic development, according to many critics, has made Keynesian economics less useful?

answer

the rise of international trade

question

Who among the following advocated for laissez-faire capitalism?

answer

Adam Smith

question

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

answer

monetarism

question

The idea that the government can stimulate a slow economy by increasing public spending or cutting taxes is called:

answer

Keynesianism

question

Which statement is the key argument of John Maynard Keynes?

answer

Government can pull an economy out of a recession by stimulating demand and creating a cycle of increased production and jobs.

question

When did Keynesian economic ideas become government practice in the United States?

answer

the 1930s

question

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

answer

a public good

question

Who was the most prominent monetarist in the United States?

answer

Milton Friedman

question

Which of the following best describes the views of Milton Friedman?

answer

Government should let the growth in the money supply match the rate of economic growth.

question

Which economist is best known for arguing that there is an optimal rate of taxation, and if taxes go above this rate, tax revenues will shrink because economic activity will decline?

answer

Arthur B. Laffer

question

How did the Federal Reserve respond to the terrorist attacks of 9/11?

answer

It cut interest rates to promote increased investment and spending.

question

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

answer

Alexander Hamilton

question

_____ is the current chair of the Federal Reserve Board, appointed by George W. Bush in 2005.

answer

Ben Bernanke

question

Which of the following statements about the Federal Reserve Board (FRB) is false?

answer

The FRB is part of the department of the Treasury.

question

Open-market operations describes:

answer

the method by which the Federal Reserve buys and sells government securities to increase or decrease the supply of money in the economy.

question

What is the reserve requirement?

answer

The rule that every bank must have a certain amount of cash and negotiable securities on hand at all times

question

If the Federal Reserve wants to help boost a sagging economy, which one of the following is the most direct way it can do this?

answer

lower interest rates so that banks can provide more loans at cheaper rate to individuals an businesses

question

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

answer

the interstate highway system

question

The power to raise or lower the tax rate is part of:

answer

fiscal policy

question

A tax on imported goods is called a:

answer

tariff

question

Before WWII, _____ of federal revenue was generated from individual income taxes.

answer

less than 15 percent

question

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

answer

regressive

question

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

answer

regressive; progressive

question

A _____ is an incentive in the tax code for individuals and corporations to invest their money in ways the government desires in exchange for a reduction in tax liabilities.

answer

loophole

question

_____ were the centerpiece of George W. Bush's economic policy.

answer

Tax cuts

question

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

answer

High income earners (making more than $250,000/year) had benefited disproportionately from economic growth in the early 2000s.

question

The _____ is determined by the amount government spending exceeds government revenue in a fiscal year.

answer

budget deficit

question

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

answer

Congressional Budget Office

question

Why do many businesses Congress to regulate the economy?

answer

One national regulation is better than the inconsistencies and disparities of different state laws.

question

Which of the following is not an example of mandatory spending?

answer

defense spending

question

Approximately what percentage of the federal budget is made up of uncontrollables?

answer

60 percent

question

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

answer

Antitrust; monopolies

question

What did Congress see as the principle cause of the economic recession that began in 2007?

answer

excessive risk taking by investors

question

_____ are government grants of cash or other valuable commodities, such as land, used to promote activities desired by the government.

answer

Subsidies

question

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

answer

They can be treated as "benefits" that can be spread widely in response to many demands.

question

Which of the following is not a benefit to government provided by contracting?

answer

Government officials almost always use contracting to award businesses and corporations that donated substantial amounts of money to their political campaigns.

question

Which of the following is not one of the concerns politicians have to consider when attempting to pass regulations that seek to protect the environment?

answer

Public opinion, which overwhelmingly favors economic interests over the environment

question

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

answer

10; 25

question

Most of the groundbreaking environmental laws were written in the:

answer

1970s

question

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

answer

Before the Progressive era, the marketplace was untouched by government interference.

question

Setting emissions standards for each industry, while allowing companies to trade "carbon credits" is an approach to environmental policy known as:

answer

cap and trade.

question

The Kyoto Protocol was designed to:

answer

set binding targets for greenhouse gas emissions to be met by each country.

question

Which of the following was not a result of the 2009 Copenhagen Summit?

answer

The meeting ended with a legally binding agreement between countries to limit greenhouse emissions across the world.

question

What year marked the beginning of the Great Depression?

answer

1929

question

Which of the following is the best description of the changing expectations of the government's role in the economy since the 1930s?

answer

People hold the government responsible for a health economy.

question

The most consistently powerful nongovernment actors in determining economic policy are:

answer

business organizations.

question

Which of the following is not a possible cause of the increase in economic inequality over the past several decades?

answer

the collapse of the domestic high-tech industry

question

Which of the following was a driving force for the economic growth during the late 19th century?

answer

manufacturing industries

question

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

answer

gross domestic product (GDP)

GOVT 2302: Quiz 13 – Flashcards

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