Deck 3: The Economy: Changing Government-Business Relationships

Question 1

Economist John Maynard Keynes suggested

A)Getting involved in WWII
B)New approach to the relationship between government and economy
C)Aid to particular enterprises
D)Influencing the private sector to perform a certain way

Answer 1

B

Question 2

Microeconomics is concerned with

A)overall management of the economy
B)government regulation of specific types of business
C)control of the money supply
D)management of the national debt

Answer 2

B

Question 3

The reluctance of the national government to curb the abuses of the economic activities of large corporate enterprises is called

A)Free Market
B)Laissez faire
C)Market Failure
D)Natural monopolies

Answer 3

B

Question 4

The American Revolution was started in part because of

A)the British monarchy
B)religious differences
C)lack of development
D)financial grievances of the colonists

Question 5

Milton Friedman defined a pure free enterprise economy to include all of the following,BUT

A)independent from government interest
B)public ownership of production and distribution
C)maximizing of economic self-interest
D)competition

Question 6

Proponents of free-market capitalism favor

A)interference of government in the economy
B)more equal distribution of wealth among citizens
C)non-interference of government in the economy
D)government ownership of enterprise

Question 7

In the welfare-state capitalism system,allocation of goods and services,and frequently prices are largely planned,but the major means of production are in private hands and run for profit

Question 8

Government involvement in the economy supports both the prosperity goal and meeting the needs of people

Question 9

Which of the following is NOT a positive feature of the free market system?

A)competition
B)efficiency
C)productivity
D)market failure

Question 10

President Roosevelt's economic policies were influenced by

A)Kenneth Galbraith
B)John Maynard Keynes
C)Milton Friedman
D)Adam Smith

Question 11

Inflation is

A)The increase in production
B)The increase in the purchasing power of money
C)Increase in the value of goods and services
D)Rise in the price of goods and services

Question 12

President Hoover's administration's raising income taxes and balancing the budget fixed the problems created by the Great Depression.

Question 13

Government monopolies typically run all of the following services except for

A)Education
B)Postal Services
C)Telephone
D)Transportation

Question 14

These countries have a capitalist economic approach,with a mixture of private ownership and public control characteristics,EXCEPT for

A)Sweden
B)China
C)Japan
D)United States

Question 15

Which of the following is NOT an assumption underlying market theory?

A)Human beings are motivated by economic wants.
B)Prices are set by government.
C)People have perfect information on which to make rational economic choices.
D)There is perfect competition.

Question 16

President Roosevelt's steps to address the Great Depression did NOT include

A)Economic regulations
B)Public works programs
C)Agricultural support programs
D)A space program

Question 17

The American economy is predominantly

A)socialist
B)mercantilist
C)market capitalist
D)government regulated

Question 18

Which of the following does not reflect real-life economies?

A)Demand created through advertising
B)People act based on enjoyment despite negative consequences
C)Lack of perfect information
D)Unlimited time and choices

Question 19

Early in its history,the U.S.government attempted to stimulate development through government subsidy.Which program was NOT subsidized?

A)roads and canals
B)Railroad industry
C)Mining
D)Educational institutions

Question 20

Economic systems can roughly be divided into two extreme alternatives: free enterprise,also known as _______,and public ownership,also known as _________.

A)capitalism; socialism
B)Fascism, Communism
C)Communism; Democracy
D)free world; non-free world

Question 21

Social regulations have been a part of U.S.policies since 1970.Businesses must comply with all of the following EXCEPT for

A)Worker safety
B)Product safety
C)Wage and hour policies
D)Nondiscrimination policies

Question 22

Class action lawsuits can be difficult to pursue because of

A)courts require litigants to demonstrate personal injury in order to be a party
B)litigants are required to identify and notify all members of the class
C)most people respond to the court notification
D)people are hard to locate

Question 23

The FTC is an example of

A)A regulatory agency
B)An executive branch department
C)Presidential commission
D)Independent regulatory commission

Question 24

The Federal Trade Commission has trouble enforcing antitrust policy because of

A)its small staff and budget
B)congressional interference
C)lengthy appeals procedures
D)all of the above

Question 25

Business regulation and business subsidy programs are examples of microeconomic policy.

Question 26

These countries have had trade restrictions imposed them by the United States Governments as a result of the Omnibus Trade Act of 1988

A)Japan, Canada and Mexico
B)Germany, Mexico and South Korea
C)China, Canada and Japan
D)Japan, India and China

Question 27

One area that the government refuses to regulate is the environment.T/F

A)True
B)False

Question 28

NAFTA was enacted by Congress in November 1993,creating a free trade area among

A)USA, Canada and Brazil
B)USA, Canada and Mexico
C)USA, Mexico and Brazil
D)USA, Argentina and Brazil

Question 29

Antigua & Barbuda filed complaints against the United States under WTO because of restrictions on

A)steel imports
B)horse racing
C)internet gambling
D)farm export

Question 30

The move to curtail the extensive government oversight of private firms during the 1980's is called _____.

A)Privatization
B)Nationalization
C)Cartelization
D)Deregulation

Question 31

Commissions work does NOT include

A)Policymaking
B)Investigation
C)Implementing policy
D)Hearing evidence of policy violation

Question 32

Subsidies are used by the government to provide support to economic enterprises

Question 33

Supporters of GATT argue that the agreement

A)opens new markets for US construction firms, architects and engineers
B)reduces jobs in USA
C)lowers wages for American workers
D)(A) and (B) only
E)none of the above

Question 34

Antitrust policy addresses which of the following types of market distortions?

A)Monopolies
B)Current Account Deficits
C)Capital Flight
D)Trade Deficits

Question 35

In microeconomic policy,which of the following is/are highly influential?

A)President
B)Congress
C)Federal Reserve Board
D)all of the above
E)(A) and (B)

Question 36

Which of the following is NOT a type of microeconomic policy?

A)antitrust
B)changes in the federal funds rate
C)regulation of specific industries
D)government-owned enterprises

Question 37

The ______________ was created by Congress to stem the development of monopolies and prevent practices that would lead to unfair competition.

A)General Agreement on Tariffs and Trade
B)Federal Trade Commission
C)Treasury Department
D)Free market
E)Fairness in Business Act

Question 38

Which of the following is a FALSE assumption about Class Action Lawsuits?

A)It is fairly easy to locate and notify members of the class
B)They are a major means of accomplishing regulations
C)They are each to pursue
D)all of the above

Question 39

Enterprise zones adopted during the Clinton administration provide the following benefits except for

A)reduced taxes.
B)tax credits.
C)increased regulations
D)technical assistance

Question 40

Unmanned drones are a very popular weapon used by the U.S.military and CIA in Pakistan and Afghanistan.

Question 41

The current conservative approach to deregulation relies primarily on

A)program evaluation of major public policies
B)performance reviews of important government agencies
C)reducing government spending to stifle regulations

Question 42

Liberal,consumer-oriented critics of economic regulation have complained that the federal regulators often are dominated by the industries that they regulate.

Question 43

The use of risk subsidies is another way government supports economic enterprise.These enterprises received subsidies except for

A)sugar producers
B)health care insurance
C)financial institutions
D)Ford motor company

Question 44

Deregulation has

A)resulted in higher airline fares
B)reduced interest rates that banks can pay
C)reduced crowding at hub airports
D)given airlines and truckers greater flexibility in routes
E)improved transportation services to small towns

Question 45

______________ requires that agencies and their programs be given specific periods of existence and be reviewed at the end of the time allotted.

A)Consumer oversight
B)Deregulation
C)Regulation
D)Sunset legislation
E)Community revitalization

Question 46

•What is a Free Market System? What are the basic assumptions that a Free Market System is based on?
•What are the erroneous assumptions that the Free Market is based on? Why are they thought to be erroneous?
•What are Enterprise Zones? What do they aim to accomplish and how do they go about accomplishing it? Discuss three potential drawbacks to Enterprise Zones
•How NAFTA work? Has implementation of NAFTA caused American citizens to lose their jobs? How has NAFTA improved the U.S.economy?
•Several governors have cancelled major construction projects because of concerns with the cost.These cancellations will cost their state funding and jobs.Why is cancelling a good idea for the state? Is the cancellation about political points or good economic decision making?
•What are the economic policies included in the Stimulus package? Why did President Obama push this idea rather than extending the Bush Tax Cuts?

Question 47

Industry complains that government regulation impacts its operations in the following way,except for

A)interferes with its capacity to operate efficiency in a free society
B)paperwork is manageable and easily dealt with
C)red tape and complex regulation make compliance impossible
D)regulatory agencies have become pervasive all economic areas