Deck 14: Economic and Social Policy

Question 1

Monetary policy is a shared exercise between the national government and the states.

Answer 1

False

Question 2

Social Security is the least popular social program in the United States.

Answer 2

False

Question 3

The Federal Reserve Board is in charge of fiscal policy in the United States.

Answer 3

False

Question 4

Implementation of a public policy is an ongoing process.

Question 5

Democrats have traditionally sought to change the Social Security system to partial privatization so that the trust fund does not decrease and go bankrupt.

Question 6

Economic regulations created by government officials have a limited impact on the economy.

Question 7

Poverty in America

A) has been addressed by federal officials since 1789.
B) has never been addressed by federal officials.
C) was first addressed by federal officials after the Civil War.
D) was first addressed by federal officials in the 1930s.

Question 8

U.S. government officials first made full employment an explicit goal of their economic
policy in 1998.

Question 9

The U.S. Department of Education was created in 1862.

Question 10

The ownership society articulated by President George W. Bush included partially privatizing Social Security.

Question 11

Payroll taxes are progressive.

Question 12

Interest on the debt is mandatory spending.

Question 13

The age to receive full benefits for retirement in the Social Security program was increased
from 65 to 75 in 2005.

Question 14

Budgetary power shifted from the president to Congress in 1921.

Question 15

The assassination of President John F. Kennedy led to the passage of gun control legislation.

Question 16

President Ronald Reagan embraced Keynesian economics in the 1980s.

Question 17

Fiscal policy has redistributive implications.

Question 18

Federal policy makers have a plan in place to address the baby boomers and Social Security.

Question 19

Each woman, man, and child in the United States carries, in effect, less than $4,500 of the
national debt.

Question 20

The Federal-State Unemployment Compensation Program was established in 1965 as part of the creation of Medicare.

Question 21

Keynesian economics was developed in the ________.

A) 1780s
B) 1840s
C) 1930s
D) 1970s

Question 22

Which one of the following statements is accurate?

A) The U.S. Treasury Department distributes money to banks in the Federal Reserve System.
B) The U.S. Treasury Department produces currency and coins.
C) The U.S. Treasury Department is in charge of monetary policy.
D) The Fed is in charge of fiscal policy.

Question 23

Which one of the following statements is accurate?

A) Budget deficits are cumulative figures over time.
B) Budget deficits are figures in a given fiscal year.
C) The national debt is a figure in a given fiscal year.
D) Borrowing money over time reduces the national debt.

Question 24

The theory that lowering taxes will stimulate the economy because of increased investment and spending among the public is called

A) Keynesian economics.
B) fiscal federalism.
C) supply-side economics.
D) central economic planning.

Question 25

The U.S. economy begins to experience rapid inflation. The MOST likely short-term response would be

A) the Commerce Department issues price-control regulations.
B) the Federal Reserve Bank raises interest rates.
C) Congress passes tax increases.
D) the president asks business leaders to hold salaries steady.

Question 26

During the nation's economic crisis in 2008-2009, what would a proponent of Keynesian economics have done?

A) supported the government's entire $787 billion stimulus plan of tax cuts and government spending
B) supported the stimulus plan's tax cuts but not the increases in government spending
C) opposed the stimulus plan's tax cuts but supported the increases in government spending
D) opposed the government's entire stimulus plan because it added to the federal debt

Question 27

Generally, when do members of Congress create their own budget?

A) when there is unified party government
B) when there is divided party government
C) when federal judges order them to do so
D) when the chair of the Federal Reserve orders them to do so

Question 28

Each person (adult and child alike) carries more than ________ of federal debt.

A) $4,500
B) $21,000
C) $47,000
D) $1.5 million

Question 29

What did the Employment Act of 1946 do?

A) provided higher-education assistance to 7.8 million World War II veterans
B) created new regulations and safeguards to protect against inflation
C) guaranteed all Americans the right to unemployment insurance
D) created the Council of Economic Advisers and made full employment a goal of economic policy

Question 30

What does the gross domestic product (GDP) measure?

A) the annual difference between a country's imported goods and exported goods
B) a country's economic output and activity
C) the country's total annual sales of manufactured goods
D) the goods consumed in the nation over a year

Question 31

State governments

A) have a central role in education and welfare.
B) have a central role in monetary policy.
C) do not administer federal programs.
D) have no role in education since the passage of the No Child Left Behind law.

Question 32

Which one of the following is an example of mandatory spending in the federal budget?

A) funding for the national park and forest systems
B) national security expenditures for the Department of Homeland Security
C) an entitlement program such as Social Security
D) funding for the National Aeronautics and Space Administration (NASA)

Question 33

When the Budget and Accounting Act of 1921 was passed,

A) the budgetary process was centralized within Congress.
B) budgetary power shifted from the states to the national government.
C) budgetary power shifted from Congress to the president.
D) budgetary power shifted from the president to Congress.

Question 34

The philosophy of using tax cuts and increased government spending during a recession was developed by ________.

A) John Maynard Keynes
B) Milton Friedman
C) Friedrich Hayek
D) Arthur Laffer

Question 35

________ was a staunch advocate of supply-side economics.

A) Ronald Reagan
B) Tip O'Neill
C) Ted Kennedy
D) Jimmy Carter

Question 36

When there is too much money flowing and too few goods, it is likely to lead to

A) tax cuts.
B) a rise in taxes.
C) an interest rate cut.
D) inflation.

Question 37

The Misery Index is based on

A) a stagnant economy with inflation.
B) the sum of the inflation rate and the unemployment rate.
C) increases in the cost of living combined with slow growth in the nation's gross domestic product (GDP).
D) the nation's income inequality rate combined with various quality-of-life indicators.

Question 38

During the Reagan presidency, taxes and spending fell as a share of the overall economy. What was the result?

A) budget surpluses that gradually helped pay off the federal debt
B) a balanced federal budget by the end of Reagan's presidency
C) no major changes in the nation's annual deficits or overall debt
D) continued budget deficits and a significant increase in the nation's federal debt

Question 39

Taxing and spending decisions are known as ________ policy.

A) punitive
B) mandatory
C) monetary
D) fiscal

Question 40

________ and Ronald Reagan had a similar approach to fiscal policy.

A) Jimmy Carter
B) Barack Obama
C) George W. Bush
D) Bill Clinton

Question 41

If the Fed governors wanted to put downward pressure on the FFR, they would likely

A) sell government bonds to banks.
B) purchase government bonds from banks.
C) increase the reserve requirement.
D) increase the discount rate.

Question 42

Fewer than ________ percent of Americans are living in poverty according to the current measure.

A) 5
B) 14
C) 28
D) 43

Question 43

The Fed can be characterized as ________.

A) politically dependent on Congress.
B) politically dependent on the president.
C) politically independent.
D) a very weak body that has no power to influence the domestic economy.

Question 44

The specific interest rate that banks pay each other for emergency overnight loans is called

A) an emergency loan rate.
B) an overnight loan rate.
C) a federal reserve rate.
D) a federal funds rate.

Question 45

Why was the Interstate Commerce Commission created in 1887?

A) to promote Prohibition
B) to promote morality
C) to regulate railroads
D) to regulate the environment

Question 46

Which one of the following is an example of a progressive tax?

A) the income tax
B) the payroll tax
C) the gas tax
D) the cigarette tax

Question 47

The logic behind lowering interest rates is to

A) decrease the amount of money being borrowed.
B) lower inflation.
C) increase the amount of money being borrowed.
D) encourage people to buy government bonds.

Question 48

The reserve requirement requires

A) the federal government to insure all bank deposits of up to $250,000.
B) the Federal Reserve to hold a minimum amount of gold and precious metals.
C) the Treasury Department to reserve a portion of U.S. currency in the event of a
National emergency.
D) banks to have a certain amount of money on hand to back up their assets.

Question 49

The Fed's ultimately accountability is to ________.

A) Congress
B) the president
C) itself
D) government regulators

Question 50

The ________ put many people to work during the Great Depression.

A) Agricultural Adjustment Act
B) Federal Emergency Relief Administration
C) Civilian Conservation Corps
D) Jobs Training and Partnership Act

Question 51

The specific interest rate that banks pay to the Federal Reserve Bank for short-term loans is called

A) a short-term rate.
B) a discount rate.
C) an emergency loan rate.
D) a federal reserve rate.

Question 52

________ was largely responsible for expanding Medicare to include a prescription drug benefit.

A) Lyndon Johnson
B) Richard Nixon
C) Bill Clinton
D) George W. Bush

Question 53

The Sherman Antitrust Act led to the dissolution of the ________ monopoly.

A) coal
B) oil
C) railroad
D) telegraph

Question 54

Which one of the following programs was NOT created during the New Deal?

A) Medicare
B) Social Security
C) Agricultural Adjustment Administration
D) Civilian Conservation Corps

Question 55

Payroll taxes (Social Security and Medicare) are ________.

A) progressive
B) not redistributive
C) discretionary
D) regressive

Question 56

One of the first social welfare programs enacted by the federal government was financial assistance to veterans of ________.

A) the Civil War
B) World War I
C) the Spanish American War
D) World War II

Question 57

The Great Society was a set of social policies developed by President ________.

A) Franklin Roosevelt
B) Lyndon Johnson
C) Harry Truman
D) John F. Kennedy

Question 58

Which one of the following constitutes the highest portion of expenditures in the national budget?

A) discretionary spending
B) mandatory spending
C) net interest
D) acutal/projected

Question 59

Which one of the following statements is accurate?

A) The proportion of revenue received from payroll taxes is much lower today than in the early 1960s.
B) The proportion of revenue received from corporate income taxes is much less today than in the early 1960s.
C) The proportion of spending on the net interest on the debt is much higher today than it was in the early 1960s.
D) The proportion of spending on Social Security is lower today than in the early 1960s.

Question 60

Government assistance, usually in the form of financial assistance, to individuals in need is called ________.

A) block grants
B) welfare
C) Medicare
D) Social Security

Question 61

About ________ percent of the elderly in America live in poverty.

A) 10
B) 27
C) 33
D) 50

Question 62

What was one of the consequences of No Child Left Behind?

A) increased federal funding for education
B) expanded Head Start to every school district
C) national accountability and testing requirements in every school district
D) decreased federal funding for education

Question 63

Which one of the following was a component of President George W. Bush's plan to scale back social programs?

A) end the War on Poverty
B) add a prescription drug plan to Medicare
C) eliminate Medicaid
D) privatize portions of Social Security

Question 64

What is a major critique of partial and full privatization of Social Security?

A) Recipients will receive less money.
B) The federal government gets to decide which private investments are made.
C) State governments would tax profits made from private investments.
D) Transition to privatization would be expensive.

Question 65

Social Security

A) does not cover disabilities.
B) does not cover those who have survived the death of a loved one.
C) provides benefits to more than 62 million people.
D) provides an average monthly benefit of over $5,000 for most people.

Question 66

Why is the retirement of the baby-boom generation considered a problem for the future of Social Security?

A) More retirees mean more people on Medicare, which shares a funding pool with Social Security.
B) Retirees tend to cluster in certain states, which means that the states they are moving from will lose the benefits of their Social Security payments.
C) Social Security functions best when there are fewer workers and more retirees, thus increasing support for the program.
D) Retiring baby boomers will reduce the number of workers per retiree and strain the financial resources of the program.

Question 67

Funding for the Great Society was quickly threatened by ________.

A) income tax cuts passed by Congress
B) World War I
C) the Korean War
D) the Vietnam War

Question 68

Which one of the following statements is accurate about Medicaid?

A) It is a health care program for the elderly.
B) It is an entitlement.
C) It is a program than mandates federal control over the states.
D) It is a program that operates on a healthy surplus.

Question 69

Social Security

A) creates class conflict.
B) is very inefficient and wasteful.
C) has helped to reduce poverty.
D) has a 10 percent tax on all income.

Question 70

Overall, Americans spend ________ on health care compared to the rest of the world.

A) much more
B) a little more
C) a little less
D) much less

Question 71

No Child Left Behind is an example of education policy

A) becoming more controlled by state and local governments.
B) becoming more controlled by the federal government.
C) increasingly being funded by the federal government.
D) passed during the Great Society.

Question 72

What do most policy experts say about the future of the Social Security system?

A) The system's collection and allocation of funds will be the same.
B) The amount of funds coming into the system will increase, because the number of people working is increasing dramatically.
C) The amount of money coming into the system will decrease, because the number of people retiring is increasing dramatically.
D) It will cease to exist, because the Social Security Act of 1935 is scheduled to expire in 2050.

Question 73

The purpose of the Land Grant College Act was to

A) build more colleges and universities during the nineteenth century.
B) build more colleges after World War II.
C) establish colleges that would promote education in areas such as business and finance.
D) establish colleges that would promote education in areas such as agriculture and mechanical arts.

Question 74

Every president since ________ who attempted comprehensive health care reform failed until Barack Obama.

A) Ulysses S. Grant
B) Theodore Roosevelt
C) Harry Truman
D) Lyndon Johnson

Question 75

Which one of the following is NOT a recommendation made by public policy experts to keep the Social Security system working effectively?

A) gradually increase the retirement age to 80
B) raise the age requirement to qualify for Social Security
C) lower benefits for nonworking spouses and wealthier individuals
D) raise payroll taxes

Question 76

Generally speaking, Medicare provides insurance for ________, while Medicaid provides insurance for ________.

A) government employees; senior citizens
B) senior citizens; the poor
C) the poor; senior citizens
D) senior citizens; government employees

Question 77

The Social Security Administration trust fund will not be able to keep up with demand. Projections suggest the program will only be able to pay about ________ percent of its obligated expenditures in 2037.

A) 95
B) 79
C) 52
D) 23

Question 78

A social policy vision such as George W. Bush's, in which citizens take responsibility for their own social well-being, is called ________.

A) the Second Great Society
B) the New Deal society
C) the ownership society
D) the safety net society

Question 79

The baby boom generation

A) is set to retire in about 25 years.
B) was born between 1966 and 1986.
C) will pose a financial strain on the Social Security system.
D) has increased the ratio of workers to retirees significantly.

Question 80

Although there is some variation, Medicare is a government-sponsored health care program for

A) people living below the poverty line.
B) retired people.
C) all children under the age of 18.
D) the working poor.