Question 1

The rate paid to borrow money is known as the ______ rate.

Accepted Answer

The rate paid to borrow money is known as the interest rate.

Question 2

A major criticism of the Federal Reserve system is that while governed by a nominated and confirmed board of directors, it is primarily owned by ______.

Accepted Answer

The Federal Reserve System, while overseen by a board of directors appointed by the President and confirmed by the Senate, is primarily owned by private banks. These banks hold stock in their regional Federal Reserve Bank, reflecting the system's unique public-private structure.

Question 3

The two primary actors formulating U.S. foreign policy are ______.

Accepted Answer

According to the U.S. Constitution, the president is the primary actor in formulating foreign policy, with Congress playing a secondary role through its authority over funding and the ratification of treaties. Therefore, the correct answer is D, the president and Congress.

Question 4

The use of extreme violence to achieve political ends is called ______.

Accepted Answer

Terrorism is the use of extreme violence, such as bombings or armed attacks, to intimidate or coerce a government or population into giving into political demands. The other options do not necessarily involve the use of extreme violence for political ends.

Question 5

A set of economic policy tools designed to regulate the amount of money in the economy (in circulation and in deposits) is known as ______ policy.

Accepted Answer

Monetary policy refers to the actions taken by a central bank to regulate the money supply and achieve economic goals such as controlling inflation, promoting economic growth, and stabilizing employment. This can be done through various measures such as adjusting interest rates, buying or selling government securities, or changing reserve requirements for banks. Fiscal policy, on the other hand, involves the government's use of taxes and government spending to achieve similar economic goals. Social welfare policy refers to government programs and policies designed to provide assistance to individuals and families in need.

Question 6

The war in Iraq that began in 2003 was a type of ______, because the United States was launching an attack on an enemy before the enemy launched an attack on the United States.

Accepted Answer

A preemptive war is a war launched by a country to prevent an attack by an enemy. In the case of the Iraq War, the United States launched an attack on Iraq because they believed Iraq had weapons of mass destruction and posed a threat to the United States, even though Iraq had not launched an attack on the United States. This is a classic example of a preemptive war.

Question 7

Except for a time during the Civil War under President Abraham Lincoln's administration, individual incomes ______.

Accepted Answer

Individual incomes were not taxed until 1913 with the passage of the 16th Amendment to the United States Constitution.

Question 8

Under Keynesianism, business cycles are driven by the aggregation of individual decisions over ______.

Accepted Answer

Keynesianism theory states that business cycles are driven by the aggregation of individual decisions over spending and saving. The theory argues that in a recession, households tend to save more and spend less, which causes businesses to reduce investment and lay off workers. This leads to further reductions in spending and a downward spiral in the economy. To counteract this, Keynesian economics suggests government intervention to increase spending and stimulate economic activity.

Question 9

The ______ is/was an attempt by European countries to integrate politically and economically, so as to never have to experience another world war.

Accepted Answer

The European Union was created after World War II as an effort to unify European countries economically and politically in order to prevent another war from occurring. The Marshall Plan was a program by the United States to financially support the economic recovery of Europe after World War II. The Commonwealth of Independent States (CIS) was formed after the collapse of the Soviet Union and is a confederation of former Soviet Republics. The United Nations was formed in 1945 to promote international cooperation and prevent future wars. While it has played a role in European politics, it is not specifically a European organization.

Question 10

When the federal government takes in less money than it spends, it runs a budget ______.

Accepted Answer

A budget deficit occurs when the government spends more money than it takes in. This results in a shortfall that needs to be covered with borrowing or other financial resources.

Question 11

If the federal government takes in more money than it spends, then it runs a budget ______.

Accepted Answer

A budget surplus occurs when the government takes in more money (revenue) than it spends on programs and services. This allows for the accumulation of funds that can be used to pay off debt or invested in other areas. A budget deficit is the opposite, when the government spends more than it takes in revenue. An allocation refers to the distribution of funds towards specific programs, while analysis involves examining data and information to make informed decisions.

Question 12

Unlike Keynesians, supply-side theorists argue for a stable money supply achieved by focusing on ______.

Accepted Answer

Supply-side theorists argue that lower tax rates will increase incentives for people to work and invest, leading to an increase in productivity and output. This increased output will lead to greater economic growth and job opportunities, which then reduces unemployment rates. Additionally, by increasing the supply of goods and services, inflationary pressures can be kept under control, resulting in a stable money supply.

Question 13

Under Keynesian economics, in periods of economic contraction, the government should ______.

Accepted Answer

According to Keynesian economics, during periods of economic contraction, the government should increase spending and inject more money into the economy to stimulate demand and boost economic growth. This can be done through measures such as fiscal stimulus packages and increased government spending on infrastructure projects and social welfare programs. This approach is based on the belief that increased government spending will create a multiplier effect, whereby every dollar spent by the government will generate more than a dollar of economic activity.

Question 14

One of the Federal Reserve's stated goals is to maintain "moderate inflation" of around ______.

Accepted Answer

The Federal Reserve's stated goal is to maintain "moderate inflation" of around 2%.

Question 15

Critics of supply-side theory often use the term ______ to describe it.

Accepted Answer

The term "trickle-down economics" is often used by critics of supply-side theory to describe the belief that benefits to the wealthy, such as tax cuts, will eventually "trickle down" to the rest of society, leading to economic growth and prosperity for all.

Question 16

On September 11, 2001, the terrorist organization ______ hijacked four American commercial aircraft and crashed them into the World Trade Center towers, the Pentagon, and, in a struggle with the passengers on the plane, into a field in Pennsylvania.

Accepted Answer

Al Qaeda claimed responsibility for the 9/11 attacks.

Question 17

Which of the following is considered the central bank of the United States?

Accepted Answer

The Federal Reserve System is considered the central bank of the United States, while the Treasury Department is responsible for managing the government's finances, the Federal Deposit Insurance Corporation provides insurance for deposits in banks, and the First National Bank of the United States was the precursor to the modern Federal Reserve System.

Question 18

Supply-side theory is often called ______.

Accepted Answer

Supply-side theory is often called Reaganomics because President Ronald Reagan was a strong proponent of this economic theory, which emphasized reducing taxes and government regulation to stimulate economic growth.

Question 19

The goal of ISIS was to establish a worldwide ______, or an Islamic state ruled by a political and religious leader with absolute authority.

Accepted Answer

The term "caliphate" refers to an Islamic state ruled by a political and religious leader with absolute authority. This was the goal of ISIS, as they sought to establish a caliphate that would encompass not just the Middle East, but eventually the entire world.

Question 20

The ______ got its spark in December 2010 in Tunisia, when the street vendor Mohamed Bouazizi set himself on fire as an act of protest.

Accepted Answer

The Arab Spring refers to a series of protests and uprisings that began in Tunisia in December 2010 and quickly spread to other countries in the Middle East and North Africa. The spark for the movement was the self-immolation of street vendor Mohamed Bouazizi, who was protesting against government corruption and harassment. The Arab Spring led to the overthrow of several authoritarian regimes and the beginning of political reforms in the region.

Quiz 13: Public Policy: Promoting the General Welfare and Advancing Americans Interests