Question 1

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.F) C) and E)
G) B) and E)

Question 2

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 1862F) A) and B)
G) A) and C)

Question 3

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.F) None of the above
G) A) and B)

Question 4

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.F) B) and D)
G) A) and C)

Question 5

, 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.F) A) and E)
G) A) and B)

Question 6

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

Accepted Answer

Monetary policy is based on manipulation...

Question 7

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%F) A) and E)
G) None of the above

Question 8

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

Accepted Answer

A)   monetary
B)   military
C)   fiscal
D)   budgetary
E)   securityF) A) and B)
G) None of the above

Question 9

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.F) A) and E)
G) A) and B)

Question 10

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.F) A) and E)
G) B) and C)

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 YellenF) All of the above
G) D) and E)

Question 12

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.F) C) and E)
G) A) and E)

Question 13

Advocates of deregulation are primarily concerned with

Accepted Answer

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

Question 14

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.F) B) and D)
G) A) and D)

Question 15

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.F) C) and D)
G) B) and D)

Question 16

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.F) A) and B)
G) A) and C)

Question 17

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.F) C) and E)
G) B) and E)

Question 18

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.F) All of the above
G) D) and E)

Question 19

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.F) C) and D)
G) C) and E)

Question 20

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.F) C) and E)
G) B) and D)

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

Which of the following statements is true?

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economic efficiency requires

Correct AnswerverifiedShow Answer

The ________ established minimum wages.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Advocates of deregulation are primarily concerned with

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When the Fed was created in 1913,

Correct AnswerverifiedShow Answer

Which of the following government agencies regulates business competition?

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Who was appointed Fed chair in 2014?

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

Correct AnswerverifiedMonetary policy is based on manipulation...View AnswerShow Answer

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

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

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Monetary policy differs from fiscal policy in that

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

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The Tennessee Valley Authority is

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A fiscal policy solution to inflation would be to

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The Fed chair

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Monetary policy is based on manipulation...
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