Deck 5: Economic Policy and Public Budgeting

Question 1

The wealth and resources of a particular region or country is referred to as ______.

A) goods and services
B) gross domestic product
C) the economy
D) inflation

Answer 1

C

Question 2

An economy where goods and services are produced in the market as determined by the demand of consumers and the supply of producers without any interference by government is known as a ______ economy.

A) free market
B) command
C) capitalist
D) mixed economy

Answer 2

A

Question 3

An economy in which the government controls all aspects of the economy and owns everything is referred to as a ______ economy.

A) capitalist
B) mixed economy
C) free market
D) command

Answer 3

D

Question 4

The Soviet Union is an example of which of the following types of economies?

A) free market
B) command
C) mixed
D) capitalist

Question 5

An economy in which the market largely determines the production and consumption of goods and services, but there is a role for the government, is referred to as a ______ economy.

A) capitalist
B) command
C) mixed
D) free market

Question 6

The classical economic theory draws on which of the following types of economy?

A) laissez-faire
B) mixed
C) command
D) capitalist

Question 7

Which of the following economic theories posits that individuals act according to their own self-interests to make economic decisions?

A) trickle-down economic theory
B) supply-side economic theory
C) Keynesian economic theory
D) classical economic theory

Question 8

Which of the following theories contends that changes in aggregate demand affect employment?

A) supply-side economic theory
B) classical economic theory
C) Keynesian economic theory
D) trickle-down economic theory

Question 9

All of the following are tools for measuring a nation's economy except ______.

A) tax rate
B) gross domestic product
C) unemployment rate
D) inflation rates

Question 10

The percentage of people in an economy who are looking for work but do not have a job is referred to as the ______.

A) unemployment rate
B) employment rate
C) inflation rate
D) hyperinflation rate

Question 11

The rise in the cost of the same basket of goods over time is referred to as ______.

A) debt
B) deficit
C) recession
D) inflation

Question 12

Which of the following is considered to be a measure of the purchasing power of the dollar?

A) surplus
B) deflation
C) inflation
D) unemployment

Question 13

The drop in the price of the same goods over time is referred to as ______.

A) deflation
B) inflation
C) unemployment
D) debt

Question 14

Which of the following is measured by the Consumer Price Index (CPI)?

A) inflation
B) gross domestic product
C) unemployment
D) deflation

Question 15

Two or more quarters of negative economic growth or declines in gross domestic product is referred to as a ______.

A) deficit
B) deflation
C) recession
D) depression

Question 16

According to the text, sustained, long-term negative growth of the economy is referred to as a ______.

A) depression
B) recession
C) deficit
D) surplus

Question 17

Government decisions surrounding the revenues it takes in and how it spends that money is referred to as ______.

A) monetary policy
B) fiscal policy
C) tax policy
D) supply-side policy

Question 18

Decisions concerning the supply of a nation's money are a component of ______ policy.

A) supply-side
B) tax
C) monetary
D) fiscal

Question 19

The central banking system of the United States is referred to as the ______.

A) bank
B) Mint
C) Fed
D) reserve

Question 20

Currency in the United States is controlled by the ______ government(s).

A) federal
B) state
C) local
D) tribal

Question 21

Which of the following government agencies is responsible for printing more currency in the United States?

A) Federal Reserve System
B) U.S. Mint
C) U.S. Department of Treasury
D) White House

Question 22

The Federal Reserve System is responsible for all of the following except ______.

A) lending money to member banks at discounted rates
B) buying and selling treasury bonds
C) ensuring that banks are in compliance with regulations
D) setting the tax rates for local and state economies

Question 23

When banks keep a certain percentage of all the money depositors have in that bank on hand at all times, it is referred to as ______.

A) the deposit requirement
B) the cash reserve ratio
C) the monetary reserve
D) the requirement ratio

Question 24

Which of the following entities is responsible for setting interest rates for banks?

A) the White House
B) the Fed
C) the Mint
D) the states

Question 25

Which of the following types of policies was responsible for the government shutdown in 2013?

A) monetary
B) fiscal
C) tax
D) supply-side

Question 26

Fiscal policy is controlled by ______.

A) Congress and the White House
B) Congress and the Fed
C) the White House and the Fed
D) the Fed and the states

Question 27

According to the Government Finance Officers Association, all of the following are examples of budgets except ______.

A) policy documents
B) operations guides
C) personnel information
D) communication devices

Question 28

Budget resolutions and budget bills take place during which of the following stages?

A) conference committee produces one version
B) president signs or vetoes conference report
C) House and Senate budget committees review requests, form budget resolutions that must pass on each floor
D) House and Senate appropriations committees mark up bills, vote, then chambers pass it

Question 29

Budget requests are submitted to the Office of Management and Budget (OMB) in the ______.

A) spring
B) fall
C) summer
D) winter

Question 30

Recommended budgets are submitted to the president in ______.

A) March
B) April
C) January
D) August

Question 31

Appropriations bills originate in the ______.

A) White House
B) House
C) Senate
D) Supreme Court

Question 32

Localities rely on which of the following types of revenue streams?

A) payroll taxes
B) income taxes
C) sales taxes
D) property taxes

Question 33

Taxes that are paid when one purchases a certain good are referred to as ______.

A) payroll taxes
B) excise taxes
C) sales taxes
D) property taxes

Question 34

The accumulation of each year's deficit, or how much the U.S. government owes is referred to as ______.

A) tax
B) revenue
C) expenditure
D) debt

Question 35

The separation of commercial and investment banking activities was a component of the ______.

A) Glass-Steagall Act of 1933
B) Budget and Accounting Act of 1921
C) Federal Reserve Act of 1913
D) Congressional Budget and Impoundment Act of 1974

Question 36

The Government Accountability Office (GAO) was created as a result of the ______.

A) Congressional Budget and Impoundment Act of 1974
B) Economic Growth and Tax Relief Reconciliation Act of 2001
C) Banking Act of 1933
D) Budget and Accounting Act of 1921

Question 37

Which of the following passed in response to the Great Recession?

A) Troubled Asset Relief Program of 2008
B) Budget and Accounting Act of 1921
C) Glass-Steagall Act of 1933
D) American Recovery and Reinvestment Act of 2009

Question 38

Which of the following statutes was passed during President George W. Bush's presidency?

A) Banking Act of 1933
B) Congressional Budget and Impoundment Act of 1974
C) Economic Growth and Tax Relief Reconciliation Act of 2001
D) Troubled Asset Relief Program of 2008

Question 39

Which of the following statutes was passed to address issues of financial instability?

A) Economic Growth and Tax Relief Reconciliation Act of 2001
B) Troubled Asset Relief Program of 2008
C) Banking Act of 1933
D) American Recovery and Reinvestment Act of 2009

Question 40

Classical economic theorists argue that tax cuts and other incentives for investors and businesses at the top will lead to economic benefits for those at the bottom.

Question 41

Supply-side economies believe in zero government intervention to implement policies.

Question 42

Classical economic theory draws on free market ideas.

Question 43

The gross domestic product (GDP) is the nation's total production of goods and services for a single year.

Question 44

Federal budget processes did not exist before the Budget and Accounting Act of 1921.

Question 45

Deflation can ultimately impact the stock market.

Question 46

To this day, U.S. currency is still backed by metals such as gold and silver.

Question 47

The Fed can easily be controlled by politicians.

Question 48

The Fed requires banks to keep a certain percentage of all the money depositors have in that bank on hand at all times.

Question 49

The Economic Growth and Tax Relief Reconciliation Act of 2001 included property tax rate reductions and tripled the child tax credit.

Question 50

Concurrent resolution must be passed by both chambers of Congress.

Question 51

The Troubled Asset Relief Program was passed in response to the Great Recession.

Question 52

The tax code can be changed without Congressional approval.

Question 53

The Federal Reserve Act of 1913 established 12 regional banks.

Question 54

The Budget and Accounting Act of 1921 formalized the role of the executive branch in the federal budget process.

Question 55

Identify the different resources/factors that make up the U.S. economy.

Question 56

What is economic policy?

Question 57

Identify the three different types of economic theory discussed in the chapter.

Question 58

How is a nation or state's economy measured?

Question 59

What is the natural unemployment rate?

Question 60

Outline the budget process.

Question 61

Identify the common revenue forecasting methods.

Question 62

Provide some examples of tax credits.

Question 63

Identify and discuss one of the major policy and budgeting statutes discussed in the text.

Question 64

Discuss the current state of the U.S. economy. Do you believe that the U.S. economy is doing well? Why or why not?

Question 65

Identify and discuss the tools that are used to measure a nation or state's economy.

Question 66

Discuss the importance of public opinion. How can the current state of the economy impact the outcome of future elections?

Question 67

Discuss the inner workings of the banking system. You may use a hypothetical scenario.

Question 68

What factors contribute to a government shutdown?