Deck 13: Introduction to Public Policy

Question 1

Universal compulsory education is an example of government efforts to

A)enforce contracts.
B)create a labor force.
C)set market standards.
D)provide public goods.
E)ameliorate externalities.

Answer 1

B

Question 2

A voluntary agreement between two or more private persons that governs future conduct is called

A)a policy.
B)a market.
C)a contract.
D)an exchange.
E)binding arbitration.

Answer 2

C

Question 3

The market value of the goods and services produced in an economy is the

A)gross national product (GNP).
B)gross domestic product (GDP).
C)net national worth.
D)net domestic worth.
E)net international economic contribution.

Answer 3

A

Question 4

Which term describes a good that,after it is provided,may be enjoyed by anyone and may not be denied to anyone?

A)collective action good
B)public good
C)externality
D)solid good
E)public liability

Question 5

What is the first feature inherent in the very idea of government?

A)law and order
B)rules for liability
C)creation of a labor force
D)maintenance of a market structure
E)individual property rights

Question 6

Why are market standards so important to a functioning market economy?

A)They require contract enforcement.
B)They define property rights.
C)They help people understand what they are bargaining for.
D)They help people recognize the value of public goods.
E)They protect the fundamental rights of workers.

Question 7

The most fundamental way that government affects investment is by

A)cutting taxes.
B)lowering tariffs.
C)deregulating businesses engaged in interstate commerce.
D)promoting business,investor,and consumer confidence.
E)minimizing inflation.

Question 8

Laws that structure the conditions under which you can sell your property are called

A)trade agreements.
B)market standards.
C)contractual terms.
D)laws of exchange.
E)collective bargaining agreements.

Question 9

Which term describes a company that provides all the goods and services for a particular market such that competition is nonexistent?

A)simplex
B)unigarchy
C)autogarchy
D)monopoly
E)bully firm

Question 10

A contract is meaningless unless it is

A)notarized.
B)a written agreement.
C)enforceable.
D)regulated.
E)signed by both parties.

Question 11

The provision for an interstate highway system is considered to be a

A)liability.
B)labor cost.
C)public good.
D)market structure.
E)tangible good.

Question 12

Common terminology,uniform weights and measures,and consistent specifications for both quantities and qualities of goods are called

A)trade agreements.
B)contractual terms.
C)capital specifications.
D)public benchmarks.
E)market standards.

Question 13

Which of the following is NOT an example of a public good?

A)canal systems
B)lighthouses
C)airport security
D)dams
E)golf courses

Question 14

Which of the following is something the federal government does to promote economic prosperity?

A)allows skilled immigrants to enter to the United States and work
B)encourages high inflation
C)incentivizes workers to retire early
D)drafts teenagers for military service
E)limits loans to small businesses

Question 15

Why did Congress begin to adopt national business regulations?

A)They wanted to increase the amount of money that the government earns from monopolies.
B)They thought that government-sponsored monopolies were the best way to provide services to consumers in most industries.
C)They wanted to alleviate the burdens that companies faced in adapting to the regulatory inconsistencies across states.
D)They wanted to encourage the development of an automotive industry that would strengthen America's position in the world economy.
E)Occasional bubbles,fostered by regulation,are actually a healthy part of a market economy.

Question 16

Trespass laws are an example of a type of law that gives concrete meaning to what constitutes

A)property.
B)sovereignty.
C)responsibility.
D)accountability.
E)civic duty.

Question 17

Poorhouses and vagrancy laws are examples of government efforts to

A)enforce contracts.
B)create a labor force.
C)set market standards.
D)provide public goods.
E)ameliorate externalities.

Question 18

The market value of the goods and services produced in an economy minus income from foreign investments is the

A)gross national product (GNP).
B)gross domestic product (GDP).
C)net national worth.
D)net domestic worth.
E)net international economic contribution.

Question 19

What is one of the most important ways that government can protect welfare and property?

A)maintaining law and order
B)granting legal monopolies for the most profitable industries
C)allowing states to set their own unique business regulations
D)supporting the unfettered use of credit-default swaps
E)purchasing shares of stock in all major sectors of the American economy

Question 20

Why does the United States adjust the welfare system to allow certain benefits to persist for only certain periods of time?

A)Humans are fundamentally entitled to only a certain amount of government benefits.
B)Welfare service provision is easier to administer over shorter time periods.
C)Limited allowance of benefits minimizes the provision of public goods.
D)Limitations create incentives that make people prefer working to the low income they get from welfare.
E)Unavailability of welfare drives up wages.

Question 21

The amount of liquid assets and ready cash that banks are required to hold to meet depositors' demands for their money is called the

A)depositors' allowance.
B)withdrawal protection account.
C)reserve requirement.
D)stress test fund.
E)residual resource fund.

Question 22

Policies that manipulate the growth of the entire economy by controlling the availability of money to banks are called __________ policies.

A)monetary
B)reserve
C)fiscal
D)pecuniary
E)social

Question 23

The amount the government is permitted to borrow is referred to as

A)a tariff.
B)discretionary spending.
C)cap and trade.
D)the budget.
E)the debt ceiling.

Question 24

The income tax in the United States today is a __________ tax.

A)flat
B)sales
C)square
D)regressive
E)progressive

Question 25

The amount by which government spending exceeds revenues in a fiscal year is called the

A)national debt.
B)trade shortfall.
C)gross national product.
D)gross domestic product.
E)budget deficit.

Question 26

During the nineteenth century,the national government was a promoter of

A)markets.
B)monopolies.
C)deregulation.
D)categorical grants-in-aid.
E)Keynesian policies.

Question 27

An increase in the federal funds rate would

A)increase the availability of credit.
B)decrease the availability of credit.
C)have no effect on the availability of credit.
D)have an unpredictable effect on the availability of credit.
E)stimulate the economy.

Question 28

A sales tax is deemed __________ because everybody pays at the same rate,but the more you make,the lower the percentage of your income that goes to buying items and paying sales tax.

A)a tariff
B)progressive
C)regressive
D)redistributive
E)policy borrowing

Question 29

Budgetary items that can be changed only by congressional legislation are called

A)unforgivable.
B)discretionaries.
C)uncontrollable.
D)immutables.
E)prohibitions.

Question 30

Categorical grants-in-aid that funded a 900,000-mile national highway system indirectly promoted business because the project

A)pulled more workers from the private sector into government jobs.
B)also funded a worker training program.
C)facilitated the use of motor transportation to improve national markets.
D)required the import of massive amounts of oil from the Middle East.
E)required the import of massive amounts of gravel from Mexico.

Question 31

The power of the central banking system in the United States to buy and sell government securities to increase or decrease the supply of money in the economy is called

A)open-market operations.
B)reserve requisitions.
C)acquisition and divestiture functionality.
D)federal funds adjustment.
E)quantitative easing.

Question 32

Which of the following hypothetical policies is a monetary policy?

A)a policy through which the federal government buys securities to release more money into the economy
B)a policy that raises income taxes
C)a policy that creates a national sales tax
D)a policy whereby the government gives grants to states to build highways
E)a policy whereby the government requires citizens to purchase health insurance

Question 33

The type of policy that governs taxing and spending powers is

A)fiscal policy.
B)budgeting policy.
C)pecuniary policy.
D)open-market operations.
E)monetary policy.

Question 34

National tariff policies promote domestic markets by

A)encouraging free trade.
B)restricting imported goods.
C)building interstate transportation links.
D)subsidizing family farmers and urban industries.
E)bringing inexpensive labor to the United States.

Question 35

The modern system of central banks that facilitates exchanges of cash,checks,and credit is called the

A)Bank of the United States.
B)Central Banking Administration.
C)Federal Reserve System.
D)Washington Mutual Bank.
E)Department of the Treasury.

Question 36

The government's use of taxing and spending powers to manipulate the economy is called

A)fiscal policy.
B)budgeting policy.
C)pecuniary policy.
D)open-market operations.
E)social management.

Question 37

The proportion of the federal budget devoted to mandatory spending is

A)large and growing.
B)large and shrinking.
C)small and growing.
D)small and shrinking.
E)staying about the same.

Question 38

Government funds given to a state or locality that are earmarked by law for specific categories are called

A)categorical grants-in-aid.
B)block grants.
C)furtherances.
D)endowments.
E)pass-throughs.

Question 39

Which of the following policies is NOT a fiscal policy?

A)cutting the income tax
B)raising a tariff
C)eliminating the capital gain
D)borrowing money for federal spending
E)changing the federal funds rate

Question 40

Changing the interest rate at which banks lend to each other is a process called

A)open-market operations.
B)federal loan management.
C)acquisition and divestiture functionality.
D)adjustment of the federal funds rate.
E)quantitative easing.

Question 41

Until 1996,what was the most important noncontributory public assistance program?

A)the Job Training Partnership Act (JTPA)
B)the Aid to Families with Dependent Children (AFDC) program
C)the Temporary Assistance to Needy Families (TANF) program
D)the Comprehensive Employment and Training Act (CETA)
E)the Supplemental Security Income (SSI) program

Question 42

Social Security is an example of a __________ program.

A)contributory
B)noncontributory
C)monetary
D)phasing
E)means-tested

Question 43

Cost-of-living adjustments for the Social Security system are based on changes in the

A)Consumer Price Index.
B)gross national product.
C)gross domestic product.
D)quarterly national living standards survey.
E)average real disposable income.

Question 44

Congress can do all of the following if tax revenues become inadequate to fund Social Security EXCEPT

A)change the taxation of earnings.
B)change the benefit formula.
C)change the federal fund rate.
D)raise the full retirement age.
E)reduce cost-of-living adjustments.

Question 45

An example of a noncontributory program is

A)Social Security.
B)Medicare.
C)old-age insurance.
D)Medicaid.
E)unemployment compensation.

Question 46

Social Security is a tax best classified as a __________ tax.

A)flat
B)regressive
C)progressive
D)incremental
E)sales

Question 47

After the terrorist attacks of 2001,the Pentagon used which of the following powers to request weapons and surveillance systems from private businesses,such as Lockheed Martin?

A)discretionary powers
B)spending powers
C)military powers
D)contracting powers
E)surveillance powers

Question 48

The allocations of land grants to farmers and to railroad companies by Alexander Hamilton to encourage western settlement are early examples of

A)contracting.
B)lending.
C)deregulation.
D)subsidies.
E)monetary policy.

Question 49

The largest single expansion in contributory programs after 1935 was the establishment in 1965 of

A)Medicare.
B)Medicaid.
C)food stamps.
D)the school lunch program.
E)Aid to Families with Dependent Children.

Question 50

The Medicare spending bill passed by President George W.Bush and a majority-Republican Congress in 2003

A)diminished the long-term cost of Medicare.
B)decreased the range of services offered under Medicare.
C)dramatically decreased the premiums for Medicare coverage.
D)added a prescription drug benefit to the package of health benefits for the elderly.
E)increased the reimbursements to doctors treating Medicare patients.

Question 51

Since the late 1980s,the Social Security system has collected more payroll taxes than it paid out in benefits.The excess funds have been

A)invested overseas so that when the investment is cashed out it drains the economy of a foreign country.
B)used to buy gold bullion,which is stored in Fort Knox.
C)loaned to the federal government to pay for general spending.
D)invested in stocks and bonds by future recipients of the money.
E)used to purchase private real estate.

Question 52

The Obama administration brought about a major expansion of federal health care policy when it passed the

A)State Children's Health Insurance Program.
B)Patient Protection and Affordable Care Act.
C)prescription drug program known as Medicare Part D.
D)single-payer program.
E)Health Insurance Portability and Accountability Act (HIPAA).

Question 53

Proponents of the Patient Protection and Affordable Care Act argued it would do which of the following if it was signed into law?

A)It would lower health care costs by imposing greater efficiencies on providers and reducing fraud.
B)It would represent a huge expansion of federal government power.
C)It would expand the Democratic Party's base of support.
D)It would be enormously expensive.
E)It would expand the power of federal agencies,such as the Department of Health and Human Services (HHS).

Question 54

Social Security has had its moments of potential crisis in the past,but the only real crisis was in the

A)early 1930s during the Great Depression.
B)late 1970s during historic national inflation.
C)early 1980s during the period of the double-digit prime rate.
D)late 1990s during the so-called dot-com bust and era of corporate layoffs.
E)deep recession of 2008-2009.

Question 55

Contributory programs are financed by taxation,which justifiably can be called

A)extortion.
B)blackmail.
C)forced savings.
D)taxation without representation.
E)inflation-protected investing.

Question 56

Grants of cash or other commodities to an individual or organization that are used to promote activities desired by the government are called

A)subsidies.
B)block grants.
C)contracts.
D)deregulation stimuli.
E)rents.

Question 57

Since 1950,the average incomes of every income group increased,but the incomes of the wealthiest Americans (the top 5 percent) increased more sharply than those of any others.This pattern is referred to as

A)the gender gap.
B)hyper-inflation.
C)the income gap.
D)the 99 percent.
E)inflation.

Question 58

The adjustment of Social Security benefits to account for changes in living costs is an example of

A)inflation.
B)benchmarking.
C)bracket creep.
D)benefit recalibration.
E)indexing.

Question 59

Probably the greatest long-term threat to the viability of the Social Security system is the

A)pending retirement of baby boomers.
B)dramatic increase in health care costs.
C)declining political clout of senior citizens.
D)number of current workers choosing not to participate.
E)declining value of the Treasury bonds in which the Social Security trust fund is invested.

Question 60

Social plans financed in whole or in part by taxation or other mandatory investments by their present or future recipients are described as

A)public trusts.
B)enterprise funds.
C)revenue sharing.
D)contributory programs.
E)means-tested programs.

Question 61

In 1996,Congress abolished the AFDC and replaced it with the

A)Job Training and Partnership Act (JTPA).
B)Supplemental Security Income (SSI) program.
C)Old Age,Survivors,and Disability Insurance program.
D)Temporary Assistance to Needy Families (TANF) block grant.
E)food stamps program.

Question 62

Assistance provided to needy persons by the federal government that can be exchanged for food at most grocery stores are called

A)SNAP benefits.
B)market coupons.
C)nutrition certificates.
D)commodity vouchers.
E)WIC checks.

Question 63

Government makes a market economy possible.

Question 64

The greatest success of the Temporary Assistance for Needy Families (TANF) program has been that

A)more individuals have taken advantage of the assistance offered.
B)out-of-wedlock births have been reduced under program participants.
C)former welfare recipients are more successful at finding and keeping jobs.
D)most families under the program have been paid well enough to be lifted out of poverty.
E)the number of abortions among families below the poverty line has decreased.

Question 65

Supplemental Nutrition Assistant Program (SNAP) benefits are an example of a program that

A)is contributory.
B)is non-means-tested.
C)has in-kind benefits.
D)has cash benefits.
E)provides universal benefits.

Question 66

Public expenditures for Temporary Assistance for Needy Families (TANF) have not increased as much as Social Security since the mid-1990s because

A)many state governments choose not to participate.
B)eligibility qualifications were severely tightened.
C)TANF benefits are not automatically readjusted for inflation.
D)economic expansion brought more people above the poverty line.
E)the rate of inflation has been so low.

Question 67

Noncash goods and services provided to needy individuals and families by the federal government are called

A)virtual benefits.
B)in-kind benefits.
C)direct benefits.
D)commodity assortments.
E)product assortments.

Question 68

Many market standards are developed by private-sector trade associations.

Question 69

What was one of President Clinton's major achievements in the welfare field?

A)the increase of the Earned Income Tax Credit
B)the increase of the Supplemental Security interest rate
C)the increase of the number of individuals covered under AFDC
D)the increase of the number of single mothers receiving welfare assistance
E)the increase of the number of people above the poverty line receiving TANF

Question 70

Markets always produce efficient outcomes.

Question 71

Laws of exchange have deemed certain kinds of exchanges off-limits.

Question 72

The Personal Responsibility and Work Opportunity Reconciliation Act restricts individual entitlement to assistance to a lifetime limit of __________ years.

A)2
B)5
C)7
D)12
E)15

Question 73

A class of government benefits with a status similar to property in that an individual cannot be deprived of legislated benefits without due process is called a(n)

A)right.
B)claim.
C)privilege.
D)entitlement.
E)civil liberty.

Question 74

Which of the following is an example of a means-tested program?

A)Medicaid
B)Medicare
C)farm subsidies
D)Social Security
E)home mortgage interest deductions

Question 75

A program financed from general revenues that provide uniform minimum monthly income to people who demonstrate financial need and are age 65 or older,blind,or disabled is

A)Medicaid.
B)Medicare.
C)Social Security.
D)Supplemental Security Income (SSI).
E)TANF.

Question 76

An effective market economy requires government rules for the enforcement of contracts.

Question 77

The Supplemental Security Income program is an example of a

A)means-tested program that is contributory.
B)means-tested program that is noncontributory.
C)non-means-tested program that is contributory.
D)non-means-tested program that is noncontributory.
E)discretionary social support program.

Question 78

In 1996,President Clinton signed the promised welfare reform bill into law.It was called the

A)Reinventing Welfare as We Know It Act (RWWKA).
B)Public Assistance Reform and Control Act (PARCA).
C)Consolidated Omnibus Benefit Reconciliation Act (COBRA).
D)Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA).
E)Welfare to Work Program (W2W).

Question 79

The most generous TANF benefits are approximately

A)three times the federal poverty line.
B)twice the federal poverty line.
C)equal to the federal poverty line.
D)below the federal poverty line but nonzero.
E)zero.

Question 80

The procedure for determining eligibility for government public assistance programs in which a potential beneficiary must show a financial need for assistance is called

A)gap analysis.
B)means testing.
C)the dependency ratio.
D)the vulnerability formula.
E)needs assessment.