Deck 14: The Policy Process and Economic Policy

Question 1

According to Wisconsin Congressman Paul Ryan, which of the following is unsustainable due to its underlying economics?

A) defense spending
B) interest on the debt
C) Medicare
D) Medicaid

Answer 1

Medicare

Question 2

When combined with Congress and the presidency, which of the following also most directly contribute(s) to the creation of public policy?

A) interest groups
B) international alliances
C) the judicial branch
D) the media

Answer 2

interest groups

Question 3

In the context of policy process model, what step directly follows policy formulation?

A) agenda setting
B) policy legitimation
C) policy identification
D) policy implementation

Answer 3

policy legitimation

Question 4

At which of the following points in the policy process would you most expect to see the participation of a think tank?

A) policy formulation
B) policy implementation
C) policy legitimation
D) problem identification

Question 5

At which of the following points in the policy process would you expect the mass media to become most involved by critiquing existing policy?

A) agenda setting
B) policy evaluation
C) policy formulation
D) problem identification

Question 6

In the context of public policy, what effect does a trigger mechanism have?

A) It compels the legislative branch to begin the process of reauthorization and investigation.
B) It forces the executive branch to implement, or "pull the trigger on," a new policy.
C) It propels an established problem on to the next stage of the policy process.
D) It provides a legitimate way to exclude an item from an agenda.

Question 7

In creating public policy, the first step is ___________.

A) setting an agenda
B) notifying the media
C) evaluating current systems
D) identifying (or acknowledging) the problem

Question 8

The power for bureaucrats to apply policy in ways that fit particular circumstances is called __________.

A) setting an agenda
B) discretion
C) public administration
D) identifying the problem

Question 9

One of the basic functions of government is __________, which occurs when government provides a broad segment of the society with something of value.

A) administration
B) provision
C) redistribution
D) regulation

Question 10

One of the basic functions of government is __________, which occurs when the government provides things of value to specific groups.

A) allocation
B) distribution
C) redistribution
D) regulation

Question 11

Taxing workers to fund social welfare programs for the poor is an example of a __________.

A) distributive policy
B) fiscal policy
C) monetary policy
D) redistributive policy

Question 12

Which of the following helps explain the difficulty in solving the long-term debt problem in the United States?

A) The decline in social spending has reduced the level of economic growth in the United States.
B) The Democratic Party has been captured by special interest groups that benefit from high levels of debt.
C) The Republican Party refuses to reduce the level of taxes that restrict economic growth in society.
D) The rise of extreme partisanship in recent years has made compromise in this area highly unlikely.

Question 13

According to the textbook, which of the following has been the major area of concern for the Fed since the mid-1970s?

A) the balance of trade
B) the Consumer Price Index
C) the unemployment rate
D) inflation

Question 14

Under what circumstances should we expect to see budget surpluses?

A) when government spending is high
B) when taxes are low
C) when the economy is experiencing turbulence
D) when the economy is thriving

Question 15

If a country exports more goods than it imports, it would be experiencing __________.

A) a positive balance of trade
B) an external trade deficit
C) an international surplus
D) a negative balance of trade

Question 16

___________ is based on the changing costs of a specified "market basket" of goods and services.

A) The discount rate
B) The balance of trade
C) The Consumer Price Index (CPI)
D) The gross domestic product (GDP)

Question 17

When members of Congress talk about the ___________, they are talking about the difference between annual government expenditures and revenues.

A) budget deficit
B) balance of trade
C) marginal tax bracket
D) discount rate

Question 18

The main goal of fiscal policy is __________.

A) to use taxes and government spending to help stimulate or slow economic growth
B) to affect how much money is available to state governments for capital projects
C) to determine how much interest the government will pay on the federal debt
D) to stimulate the economy by increasing the number of exports into the United States

Question 19

The federal government uses fiscal policy when it raises ___________.

A) the reserve ration
B) taxes
C) the marginal tax bracket
D) the discount rate

Question 20

Before the creation of the Budget and Impoundment Act of 1974, this executive agency was the primary agency responsible for drawing up the budget.

A) Federal Reserve
B) Council of Economic Advisors
C) Social Security Trust Fund
D) Office of Management and Budget

Question 21

What is fiscal policy?

A) the government's provision of something of value to a broad segment of society
B) the power to apply policy in ways that fit particular circumstances
C) an event that pushes a recognized problem further along in the policy cycle
D) the government's use of taxation and spending policy to affect economic growth in the United States

Question 22

Which of the following is a primary player in the development of the federal budget?

A) individual interest groups
B) Board of State Governors
C) Office of Management and Budget
D) the Senate Financial Committee

Question 23

What has been the U.S. government's recent trend regarding budget deficits and the national debt?

A) Budget deficits have been increasing while national debt decreases.
B) Budget deficits have been decreasing while national debt increases.
C) Both budget deficits and the national debt are decreasing.
D) Both budget deficits and the national debt are increasing.

Question 24

What role does the Council of Economic Advisers play in the national economy?

A) It conducts research for Congress and helps to create the national budget.
B) It counsels the Fed on all its policy decisions.
C) It is appointed by the president to work within the Executive Office to provide advice on economic policy.
D) It is the policymaking arm of the Federal Reserve Board of Governors.

Question 25

An economic model that maintains that a higher rate of taxation can result in lower government revenues is called __________.

A) the Buffet rule
B) the Laffer curve
C) the OMB factor
D) progressive taxation

Question 26

According to the Laffer curve, which of the following statements is true?

A) A sufficiently high tax rate encourages productivity.
B) Cutting taxes will suppress the economy.
C) If the government cuts marginal tax rates, revenue goes down.
D) If the government raises marginal tax rates, revenue goes up.

Question 27

__________ are structured such that higher-income individuals pay a lower percentage of their income in taxes.

A) Income taxes
B) Progressive taxes
C) Payroll taxes
D) Regressive taxes

Question 28

The __________ is an executive office that monitors federal agencies and provides the president with expert advice on policy-related topics.

A) Congressional Budget Office
B) Senate Finance Committee
C) Office of Management and Budget
D) House Ways and Means Committee

Question 29

According to __________, there exists some rate of taxation above which government revenue drops.

A) the Congressional Budget Office
B) the Laffer curve
C) the Federal Open Market Committee
D) the Phillips curve

Question 30

What is income security?

A) the belief that individuals should be responsible for creating their own financial security through income, not through government handouts
B) the concept that the government should establish programs that provide a financial safety net for society's poorest members
C) the notion that the government should regulate Social Security in order to ensure benefits for future generations
D) a program that provides a minimal pension for older Americans, retirement-age surviving spouses, and dependents

Question 31

Why are some government programs referred to as entitlements?

A) because benefits are distributed automatically to citizens who meet certain specifications
B) because they are benefits available only to the working poor in the United States
C) because they are benefits funded through the Title 9 section of the 1965 Civil Rights Act
D) because they are benefits that are distributed on a case-by-case basis to select citizens in extreme need

Question 32

What is the long-term concern about the Social Security Trust Fund?

A) The rate of Social Security payroll taxes will continue to decrease.
B) The number of current retirees contributing to the fund will continue to decrease.
C) The working poor will not have access to Social Security medical benefits.
D) There will be too few workers contributing to support the increasing number of retirees.

Question 33

According to its proponents, which of the following is a benefit of the proposed national sales tax?

A) Higher-income people would receive a rebate check at the beginning of each month to put toward their retirement.
B) Those involved in illegal business activities would make a greater contribution to the legitimate economy through spending.
C) The sales tax would, by its nature, be flat.
D) The tax would be modestly progressive.

Question 34

Which of the following was a cause of stagflation when Paul Volcker was appointed chairman of the Federal Reserve in 1979?

A) falling energy prices
B) falling unemployment rates
C) huge budget deficits
D) rising productivity

Question 35

According to the Phillips curve, which of the following statements is true?

A) Increasing the money supply will cause interest rates to drop.
B) There is an inverse relationship between inflation and unemployment.
C) There is an inverse relationship between money supply and inflation.
D) Tightening the money supply will cause unemployment to drop.