Question 1

Monetary policy differs from fiscal policy in that

Accepted Answer

A)  it has to be exercised by the legislature. 
B)  the policy goals are very different. 
C)  it is a slower process than fiscal policy. 
D)  it can be implemented more quickly than fiscal policy. 
E)  None of these answers is correct. 
A)  it has to be exercised by the legislature. 
B)  the policy goals are very different. 
C)  it is a slower process than fiscal policy. 
D)  it can be implemented more quickly than fiscal policy. 
E)  None of these answers is correct.

Question 2

The Federal Reserve plays a large part in establishing ________ policy.

Accepted Answer

A)  monetary 
B)  military 
C)  fiscal 
D)  budgetary 
E)  security 
A)  monetary 
B)  military 
C)  fiscal 
D)  budgetary 
E)  security

Question 3

Which of the following government agencies regulates business competition?

Accepted Answer

A)  Federal Trade Commission 
B)  Interstate Commerce Commission 
C)  Antitrust Division of the Justice Department 
D)  all of these: the Federal Trade Commission; the Interstate Commerce Commission; and the Antitrust Division of the Justice Department 
E)  None of these answers is correct. 
A)  Federal Trade Commission 
B)  Interstate Commerce Commission 
C)  Antitrust Division of the Justice Department 
D)  all of these: the Federal Trade Commission; the Interstate Commerce Commission; and the Antitrust Division of the Justice Department 
E)  None of these answers is correct.

Question 4

Economic efficiency requires

Accepted Answer

A)  that the free market not be regulated by government. 
B)  that the output of goods and services is the highest possible given the amount of input used to produce them. 
C)  the economy to be organized around large firms. 
D)  economic transactions to be fair to each party. 
E)  economic transactions to be equal to each party. 
A)  that the free market not be regulated by government. 
B)  that the output of goods and services is the highest possible given the amount of input used to produce them. 
C)  the economy to be organized around large firms. 
D)  economic transactions to be fair to each party. 
E)  economic transactions to be equal to each party.

Question 5

Farm subsidies have traditionally had strong support in Congress, particularly from

Accepted Answer

A)  representatives from urban districts. 
B)  rural-state senators and representatives. 
C)  senators from urban districts. 
D)  the Speaker of the House and Senate president pro tempore. 
E)  Democratic senators and representatives. 
A)  representatives from urban districts. 
B)  rural-state senators and representatives. 
C)  senators from urban districts. 
D)  the Speaker of the House and Senate president pro tempore. 
E)  Democratic senators and representatives.

Question 6

The Tennessee Valley Authority is

Accepted Answer

A)  an electricity industry owned by the United States. 
B)  a private industry regulated by the United States. 
C)  a private electricity industry exempt from government regulation. 
D)  a private environmental organization that receives federal funding. 
E)  a private environmental organization with power to regulate industry. 
A)  an electricity industry owned by the United States. 
B)  a private industry regulated by the United States. 
C)  a private electricity industry exempt from government regulation. 
D)  a private environmental organization that receives federal funding. 
E)  a private environmental organization with power to regulate industry.

Question 7

In John Maynard Keynes's demand-side economic theory, an economic recession can be shortened through

Accepted Answer

A)  government spending programs. 
B)  the natural workings of the free-market system. 
C)  a raising of tariffs in the global economy. 
D)  a determination on the part of government not to spend any more than it receives in taxes. 
E)  tax cuts for the wealthy. 
A)  government spending programs. 
B)  the natural workings of the free-market system. 
C)  a raising of tariffs in the global economy. 
D)  a determination on the part of government not to spend any more than it receives in taxes. 
E)  tax cuts for the wealthy.

Question 8

Which of the following statements is true?

Accepted Answer

A)  The national debt was eliminated in 1998. 
B)  The chair of the Fed creates the president's budget on an annual basis. 
C)  Keynes advocated government spending to counteract an economic downturn. 
D)  The highest budget deficit in U.S. history was $59 billion. 
E)  The Congressional Budget Office creates the president's budget on an annual basis. 
A)  The national debt was eliminated in 1998. 
B)  The chair of the Fed creates the president's budget on an annual basis. 
C)  Keynes advocated government spending to counteract an economic downturn. 
D)  The highest budget deficit in U.S. history was $59 billion. 
E)  The Congressional Budget Office creates the president's budget on an annual basis.

Question 9

Supply-side economics, as implemented by President George W. Bush's administration, involved

Accepted Answer

A)  the supply component of the supply-demand equation. 
B)  stressing the importance of tax cuts for businesses. 
C)  stressing the importance of tax cuts for the wealthy. 
D)  an increase in the size of the national debt. 
E)  All of these answers are correct. 
A)  the supply component of the supply-demand equation. 
B)  stressing the importance of tax cuts for businesses. 
C)  stressing the importance of tax cuts for the wealthy. 
D)  an increase in the size of the national debt. 
E)  All of these answers are correct.

Question 10

Define the term monetary policy, and describe three ways the Fed implements monetary policy.

Accepted Answer

Monetary policy is based on manipulation

Question 11

Who was appointed Fed chair in 2014?

Accepted Answer

A)  Ben Bernanke 
B)  Milton Friedman 
C)  Alan Greenspan 
D)  Elizabeth Warren 
E)  Janet Yellen 
A)  Ben Bernanke 
B)  Milton Friedman 
C)  Alan Greenspan 
D)  Elizabeth Warren 
E)  Janet Yellen

Question 12

Advocates of deregulation are primarily concerned with

Accepted Answer

A)  efficiency. 
B)  equity. 
C)  externalities. 
D)  public safety. 
E)  political expediency. 
A)  efficiency. 
B)  equity. 
C)  externalities. 
D)  public safety. 
E)  political expediency.

Question 13

When the Fed was created in 1913,

Accepted Answer

A)  it had no role in the management of the nation's economy. 
B)  it was restricted to providing emergency loans to financial institutions. 
C)  it adhered to a strictly supply-side policy focus. 
D)  its primary economic management tool was to reduce inflation by restricting the money supply. 
E)  it was far more likely to increase the money supply by lowering interest rates than to restrict it by raising them. 
A)  it had no role in the management of the nation's economy. 
B)  it was restricted to providing emergency loans to financial institutions. 
C)  it adhered to a strictly supply-side policy focus. 
D)  its primary economic management tool was to reduce inflation by restricting the money supply. 
E)  it was far more likely to increase the money supply by lowering interest rates than to restrict it by raising them.

Question 14

About what percentage of the annual federal budget is accounted for by the interest paid on the national debt?

Accepted Answer

A)  50% 
B)  5% 
C)  25% 
D)  15% 
E)  2% 
A)  50% 
B)  5% 
C)  25% 
D)  15% 
E)  2%

Question 15

A fiscal policy solution to inflation would be to

Accepted Answer

A)  increase government spending. 
B)  lower tariffs and other barriers to trade. 
C)  increase the tax rate. 
D)  raise the discount rate. 
E)  decrease the tax rate. 
A)  increase government spending. 
B)  lower tariffs and other barriers to trade. 
C)  increase the tax rate. 
D)  raise the discount rate. 
E)  decrease the tax rate.

Question 16

, Adam Smith made all of the following arguments for laissez-faire capitalism, EXCEPT

Accepted Answer

A)  the desire for profit is the invisible hand that guides a capitalist system. 
B)  the government should not be allowed any role whatsoever in the economy. 
C)  private firms should be left alone to make their production and distribution decisions. 
D)  firms will try to use as few resources as possible in order to keep their prices low. 
E)  certain areas of the economy were better run by government agencies. 
A)  the desire for profit is the invisible hand that guides a capitalist system. 
B)  the government should not be allowed any role whatsoever in the economy. 
C)  private firms should be left alone to make their production and distribution decisions. 
D)  firms will try to use as few resources as possible in order to keep their prices low. 
E)  certain areas of the economy were better run by government agencies.

Question 17

Government support for agriculture in the form of price supports and income subsidies is designed PRIMARILY to

Accepted Answer

A)  increase farm production in order to meet the nation's food needs. 
B)  stabilize farm income, which would otherwise fluctuate greatly due to market and weather conditions. 
C)  promote farm conservation so as to preserve the productive capacity of U.S. agriculture. 
D)  encourage rural development. 
E)  encourage urban development. 
A)  increase farm production in order to meet the nation's food needs. 
B)  stabilize farm income, which would otherwise fluctuate greatly due to market and weather conditions. 
C)  promote farm conservation so as to preserve the productive capacity of U.S. agriculture. 
D)  encourage rural development. 
E)  encourage urban development.

Question 18

The Fed chair

Accepted Answer

A)  is appointed by the president, with no approval from the Senate. 
B)  serves a four-year term. 
C)  rarely cares about monetary policy. 
D)  has absolute authority over the Fed. 
E)  All of these answers are correct. 
A)  is appointed by the president, with no approval from the Senate. 
B)  serves a four-year term. 
C)  rarely cares about monetary policy. 
D)  has absolute authority over the Fed. 
E)  All of these answers are correct.

Question 19

A major point of debate surrounding the Federal Reserve's role in economic policy is

Accepted Answer

A)  the Fed's political accountability. 
B)  whether the president should be able to veto the Fed's decisions. 
C)  the issue of competence. 
D)  whether Congress should be able to reject the Fed's decisions. 
E)  None of these answers is correct. 
A)  the Fed's political accountability. 
B)  whether the president should be able to veto the Fed's decisions. 
C)  the issue of competence. 
D)  whether Congress should be able to reject the Fed's decisions. 
E)  None of these answers is correct.

Question 20

The ________ established minimum wages.

Accepted Answer

A)  Securities and Exchange Act of 1934 
B)  Banking Act of 1934 
C)  Airlines Deregulation Act of 1977 
D)  Fair Labor Standards Act of 1938 
E)  Homestead Act of 1862 
A)  Securities and Exchange Act of 1934 
B)  Banking Act of 1934 
C)  Airlines Deregulation Act of 1977 
D)  Fair Labor Standards Act of 1938 
E)  Homestead Act of 1862

Monetary policy differs from fiscal policy in that

The Federal Reserve plays a large part in establishing ________ policy.

Which of the following government agencies regulates business competition?

Economic efficiency requires

Farm subsidies have traditionally had strong support in Congress, particularly from

The Tennessee Valley Authority is

In John Maynard Keynes's demand-side economic theory, an economic recession can be shortened through

Which of the following statements is true?

Supply-side economics, as implemented by President George W. Bush's administration, involved

Define the term monetary policy, and describe three ways the Fed implements monetary policy.

Who was appointed Fed chair in 2014?

Advocates of deregulation are primarily concerned with

When the Fed was created in 1913,

About what percentage of the annual federal budget is accounted for by the interest paid on the national debt?

A fiscal policy solution to inflation would be to

, Adam Smith made all of the following arguments for laissez-faire capitalism, EXCEPT

Government support for agriculture in the form of price supports and income subsidies is designed PRIMARILY to

The Fed chair

A major point of debate surrounding the Federal Reserve's role in economic policy is

The ________ established minimum wages.

Political Thinking and Political Culture: Becoming a Responsible Citizen

Constitutional Democracy: Promoting Liberty and Self-Government

Federalism: Forging a Nation

Civil Liberties: Protecting Individual Rights

Equal Rights: Struggling Toward Fairness

Public Opinion and Political Socialization: Shaping the Peoples Voice

Political Participation: Activating the Popular Will

Political Parties, Candidates, and Campaigns: Defining the Voters Choice

Interest Groups: Organizing for Influence

The News Media: Communicating Political Images

Congress: Balancing National Goals and Local Interests

The Presidency: Leading the Nation

The Federal Bureaucracy: Administering the Government

The Federal Judicial System: Applying the Law

Welfare and Education Policy: Providing for Personal Security and Need

Foreign Policy: Protecting the American Way

Filters

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

Monetary policy differs from fiscal policy in that

The Federal Reserve plays a large part in establishing ________ policy.

Which of the following government agencies regulates business competition?

Economic efficiency requires

Farm subsidies have traditionally had strong support in Congress, particularly from

The Tennessee Valley Authority is

In John Maynard Keynes's demand-side economic theory, an economic recession can be shortened through

Which of the following statements is true?

Supply-side economics, as implemented by President George W. Bush's administration, involved

Define the term monetary policy, and describe three ways the Fed implements monetary policy.

Who was appointed Fed chair in 2014?

Advocates of deregulation are primarily concerned with

When the Fed was created in 1913,

About what percentage of the annual federal budget is accounted for by the interest paid on the national debt?

A fiscal policy solution to inflation would be to

, Adam Smith made all of the following arguments for laissez-faire capitalism, EXCEPT

Government support for agriculture in the form of price supports and income subsidies is designed PRIMARILY to

The Fed chair

A major point of debate surrounding the Federal Reserve's role in economic policy is

The ________ established minimum wages.

Political Thinking and Political Culture: Becoming a Responsible Citizen

Constitutional Democracy: Promoting Liberty and Self-Government

Federalism: Forging a Nation

Civil Liberties: Protecting Individual Rights

Equal Rights: Struggling Toward Fairness

Public Opinion and Political Socialization: Shaping the Peoples Voice

Political Participation: Activating the Popular Will

Political Parties, Candidates, and Campaigns: Defining the Voters Choice

Interest Groups: Organizing for Influence

The News Media: Communicating Political Images

Congress: Balancing National Goals and Local Interests

The Presidency: Leading the Nation

The Federal Bureaucracy: Administering the Government

The Federal Judicial System: Applying the Law

Welfare and Education Policy: Providing for Personal Security and Need

Foreign Policy: Protecting the American Way

Filters