Question 1

The Fed is directed by a board of governors whose seven members

Accepted Answer

A)  serve for 14 years.
B)  hold office during good behavior,in essence a lifetime appointment.
C)  serve for 4 years.
D)  retain their seat as long as the president who nominated them is in office.
E)  serve for no more than three consecutive 6-year terms.F) C) and E)
G) A) and B)

Question 2

Keynesian economics emphasizes ________ as a means of curtailing economic downturns.

Accepted Answer

A)  reduced taxes
B)  increased government spending
C)  decreased regulation
D)  decreased inflation
E)  increased taxesF) B) and D)
G) C) and D)

Question 3

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

Accepted Answer

A)  monetary
B)  military
C)  fiscal
D)  budgetary
E)  securityF) C) and D)
G) A) and C)

Question 4

The Great Recession,which began in 2008,was precipitated primarily because the federal government was too lax in regulating

Accepted Answer

A)  computer technology.
B)  the buying and selling of stocks.
C)  interest rates charged to banks.
D)  subprime mortgages.
E)  the buying and selling of junk bonds.F) B) and E)
G) B) and D)

Question 5

The tax cuts pushed by President George W.Bush while in office were premised largely on

Accepted Answer

A)  demand-side economics.
B)  supply-side economics.
C)  helping the lowest-income Americans.
D)  monetary policy.
E)  Keynesian economics.F) All of the above
G) C) and D)

Question 6

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

Accepted Answer

Monetary policy is based on manipulation of the amount of money in circulation.Monetarists believe in tightening or loosening the money supply as a way of slowing or invigorating the economy.Economist Milton Friedman was a proponent of monetarism.Control of the money supply rests with the Federal Reserve System,or the Fed for short.The Fed can influence monetary policy by lowering or raising the interest charged when member banks borrow money from their regional Federal Reserve bank,by raising or lowering the percentage of money members banks must hold in reserve,and by buying selling of government securities.

Question 7

In The Wealth of Nations (1776) ,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 produce a good when there is a demand for it.
E)  certain areas of the economy were better run by government agencies.F) C) and E)
G) B) and D)

Question 8

The creation of the Food and Drug Administration and the passage of the Securities and Exchange Act were intended to

Accepted Answer

A)  promote equity in the economy.
B)  eliminate the problem of externalities in the economy.
C)  destroy the legal foundation of the business trust.
D)  promote efficiency in the economy.
E)  None of these answers is correct.F) B) and C)
G) A) and D)

Question 9

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) A) and C)
G) A) and B)

Question 10

Which of the following government agencies regulates various aspects of business operations?

Accepted Answer

A)  Federal Trade Commission
B)  Interstate Commerce Commission
C)  Consumer Financial Protection Bureau
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) D) and E)
G) B) and E)

Question 11

What did Congress do in 1995 to reduce overregulation?

Accepted Answer

A)  It cut funding for regulatory agencies like the EPA and Securities and Exchange Commission.
B)  It passed the Airlines Deregulation Act,which eliminated government-set airfares and the requirement that airlines provide service to smaller-sized cities.
C)  It restricted the president's ability to directly request administrative regulations from agency heads.
D)  It cut the budget of the Food and Drug Administration.
E)  It enacted legislation that prohibits administrators in some instances from issuing a regulation unless they can show that its benefits outweigh its costs.F) All of the above
G) A) and B)

Question 12

If the economic problem is low productivity and high unemployment,the fiscal policy action on the demand side would be to

Accepted Answer

A)  increase taxes.
B)  cut business taxes.
C)  increase spending.
D)  decrease spending.
E)  None of these answers is correct.F) B) and D)
G) None of the above

Question 13

Which of the following statements is true?

Accepted Answer

A)  The national debt was eliminated in 1998.
B)  Demand-side policy cannot be used to slow down an economy.
C)  Demand-side stimulation typically provides more immediate help to low-income citizens more than does supply-side stimulation.
D)  The highest budget deficit in U.S.history was $59 billion.
E)  Demand-side policy suggests that government spending should increase more during and economic recession than an economic depression.F) C) and D)
G) A) and D)

Question 14

The highest rate of inflation (13 percent) since World War II occurred in ________.

Accepted Answer

A)  1955
B)  1963
C)  1979
D)  1991
E)  2002F) A) and E)
G) C) and D)

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)  decreasing government spending.
D)  raise the discount rate.
E)  decrease the tax rate.F) A) and E)
G) B) and D) C

Question 16

Democrats in Washington have usually responded to high levels of unemployment with

Accepted Answer

A)  reduced government spending.
B)  increased government spending.
C)  increased government taxes.
D)  decreased government taxes.
E)  decreased government regulation.F) A) and B)
G) None of the above B

Question 17

Government benefits for business include all of the following EXCEPT

Accepted Answer

A)  loan guarantees and direct loans.
B)  corporate tax breaks.
C)  a national transportation system.
D)  minimum-wage laws.
E)  a national education system.F) B) and D)
G) A) and D)

Question 18

About how much of annual federal spending goes to pay interest on the national debt?

Accepted Answer

A)  $30 million
B)  $300 million
C)  $30 billion
D)  $300 billion
E)  $900 billionF) A) and D)
G) A) and C)

Question 19

Advocates of deregulation are primarily concerned with

Accepted Answer

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

Question 20

Judged in the context of the full range of public policies,the government in the United States has been

Accepted Answer

A)  equally hostile to the interests of business and labor.
B)  equally supportive of the interests of business and labor.
C)  substantially more supportive of business than labor.
D)  substantially more supportive of labor than business.
E)  substantially more supportive of left-wing radicals than conservatives.F) A) and D)
G) A) and C)

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

The Fed is directed by a board of governors whose seven members

Correct Answer
verified

Keynesian economics emphasizes ________ as a means of curtailing economic downturns.

Correct Answer
verified

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

Correct Answer
verified

The Great Recession,which began in 2008,was precipitated primarily because the federal government was too lax in regulating

Correct Answer
verified

The tax cuts pushed by President George W.Bush while in office were premised largely on

Correct Answer
verified

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

In The Wealth of Nations (1776) ,Adam Smith made all of the following arguments for laissez-faire capitalism,EXCEPT

Correct Answer
verified

The creation of the Food and Drug Administration and the passage of the Securities and Exchange Act were intended to

Correct Answer
verified

The Tennessee Valley Authority is

Correct Answer
verified

Which of the following government agencies regulates various aspects of business operations?

Correct Answer
verified

What did Congress do in 1995 to reduce overregulation?

Correct Answer
verified

If the economic problem is low productivity and high unemployment,the fiscal policy action on the demand side would be to

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

The highest rate of inflation (13 percent) since World War II occurred in ________.

Correct Answer
verified

A fiscal policy solution to inflation would be to

Correct Answer
verified
C

Democrats in Washington have usually responded to high levels of unemployment with

Correct Answer
verified
B

Government benefits for business include all of the following EXCEPT

Correct Answer
verified

About how much of annual federal spending goes to pay interest on the national debt?

Correct Answer
verified

Advocates of deregulation are primarily concerned with

Correct Answer
verified

Judged in the context of the full range of public policies,the government in the United States has been

Correct Answer
verified

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

The Fed is directed by a board of governors whose seven members

Correct AnswerverifiedShow Answer

Keynesian economics emphasizes ________ as a means of curtailing economic downturns.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Great Recession,which began in 2008,was precipitated primarily because the federal government was too lax in regulating

Correct AnswerverifiedShow Answer

The tax cuts pushed by President George W.Bush while in office were premised largely on

Correct AnswerverifiedShow Answer

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

In The Wealth of Nations (1776) ,Adam Smith made all of the following arguments for laissez-faire capitalism,EXCEPT

Correct AnswerverifiedShow Answer

The creation of the Food and Drug Administration and the passage of the Securities and Exchange Act were intended to

Correct AnswerverifiedShow Answer

The Tennessee Valley Authority is

Correct AnswerverifiedShow Answer

Which of the following government agencies regulates various aspects of business operations?

Correct AnswerverifiedShow Answer

What did Congress do in 1995 to reduce overregulation?

Correct AnswerverifiedShow Answer

If the economic problem is low productivity and high unemployment,the fiscal policy action on the demand side would be to

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

The highest rate of inflation (13 percent) since World War II occurred in ________.

Correct AnswerverifiedShow Answer

A fiscal policy solution to inflation would be to

Correct AnswerverifiedC

Democrats in Washington have usually responded to high levels of unemployment with

Correct AnswerverifiedB

Government benefits for business include all of the following EXCEPT

Correct AnswerverifiedShow Answer

About how much of annual federal spending goes to pay interest on the national debt?

Correct AnswerverifiedShow Answer

Advocates of deregulation are primarily concerned with

Correct AnswerverifiedShow Answer

Judged in the context of the full range of public policies,the government in the United States has been

Correct AnswerverifiedShow Answer

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C

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B

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