Deck 13: Introduction to Public Policy

Question 1

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

Answer 1

B

Question 2

The provision of an interstate highway system is considered to be a:

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

Answer 2

C

Question 3

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

Answer 3

B

Question 4

Which of the following is NOT something the federal government does to promote economic prosperity?

A)prohibiting skilled immigrants from coming to the United States and taking American jobs
B)preventing high inflation
C)offering categorical grants-in-aid to states
D)promoting technical innovation in national security
E)offering loans to small businesses

Question 5

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 of 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 6

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 7

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 8

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

Question 9

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 10

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

Question 11

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

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

Question 12

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

A)canal systems
B)lighthouses
C)airport security
D)dams
E)gross domestic roduct

Question 13

A contract is meaningless unless it is:

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

Question 14

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 15

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 16

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

Question 17

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 18

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

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

Question 19

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 20

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 21

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 22

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 23

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 24

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 25

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 26

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 27

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

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

Question 28

A sales tax is deemed ________ because everybody pays at the same rate,so that the total income paid in taxes goes down as the total income goes up.

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

Question 29

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

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

Question 30

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 31

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 32

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 33

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 34

Budgetary items that are beyond the ability of budgetary committees to alter and can be changed only by congressional legislation (or,in some instances,not even by congressional legislation)are called:

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

Question 35

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 36

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

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

Question 37

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 38

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 39

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 40

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 41

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)Medicaid program
E)Health Insurance Portability and Accountability Act (HIPPA)

Question 42

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 43

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

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

Question 44

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 45

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 program

Question 46

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 47

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 48

In his 2000 presidential campaign,Al Gore was ridiculed for his proposal to reform Social Security by keeping the trust fund in interest-bearing government securities but in what he called a(n):

A)iron safe
B)cookie jar
C)locked box
D)freezer bag
E)treasure chest

Question 49

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 50

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 51

Social Security is an example of a ________ program.

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

Question 52

The Medicare spending bill passed by 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 53

An example of a noncontributory program is:

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

Question 54

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

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

Question 55

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

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

Question 56

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 57

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

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

Question 58

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 59

The process of periodically adjusting social benefits or wages to account for increases in the cost of living is called:

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

Question 60

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 61

Government makes a market economy possible.

Question 62

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

Question 63

In 1970,the Supreme Court held that the financial benefits of the Aid to Families with Dependent Children program could not be revoked without due process in the case of:

A)Goldberg v.Kelly
B)Fabian v.Karlsen
C)Housel v.Davenport
D)U.S.v.Campbell et al.
E)Saenz v.Roe

Question 64

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 65

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 66

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 67

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 68

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 69

In 1996,President Clinton signed the promised welfare reform bill into law 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 70

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)dependency ratio
D)vulnerability formula
E)needs assessment

Question 71

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

A)food stamps
B)market coupons
C)nutrition certificates
D)commodity vouchers
E)WIC checks

Question 72

Food stamps 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 73

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 and Survivors' and Disability Insurance program
D)Temporary Assistance to Needy Families (TANF)block grant
E)Food Stamps program

Question 74

Which of the following is NOT an example of a means-tested program?

A)Medicaid
B)Medicare
C)Aid to Families with Dependent Children
D)Supplemental Security Income
E)Food Stamps

Question 75

What was President Clinton's major achievement 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 amount 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 76

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

A)two
B)five
C)seven
D)twelve
E)fifteen

Question 77

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 78

Public expenditures for Aid to Families with Dependent Children (AFDC)did not rise as much as Social Security during the mid-1970s because:

A)many state governments chose not to participate
B)eligibility qualifications were severely tightened
C)AFDC was not automatically readjusted for inflation
D)economic expansion brought more people above the poverty line
E)the rate of inflation was so low

Question 79

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 80

Markets always produce efficient outcomes.