Question 1

According to a massive study by Martin Gilens and Benjamin Page, a critical factor explaining the choice of federal policies is

Accepted Answer

The study by Martin Gilens and Benjamin Page found that the preferences of business groups and economic elites are a critical factor explaining the choice of federal policies.

Question 2

When World War II ended, soldiers came home, and a demographic "baby boom" began nine months later. That postwar generation began drawing Social Security and Medicare benefits around 2010. How does this affect mandatory spending?

Accepted Answer

The increasing number of baby boomers drawing Social Security and Medicare benefits actually increases mandatory spending. As more people become eligible for these programs, the government is required to spend more to provide the benefits promised by these mandatory programs.

Question 3

List and explain the various types of policies the federal government uses to address market failures.

Accepted Answer

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Question 4

According to Keynesian economic theory, the proper government response to a recession is to

Accepted Answer

According to Keynesian economic theory, during a recession, there is a shortfall of demand in the economy which results in high unemployment and low economic growth. To counter this, the government should increase its own spending to create demand and stimulate the economy. This is known as fiscal stimulus. Therefore, the proper government response would be to stimulate economic demand by increasing spending.

Question 5

List and define the prerequisites for a market economy.

Accepted Answer

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Question 6

Explain the differences in rewards and punishments offered by promotional, regulatory, and redistributive techniques of policy implementation.

Accepted Answer

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Question 7

The biggest source of federal contracts is purchases of

Accepted Answer

According to the Federal Procurement Data System, the Department of Defense accounted for 63.4% of all federal contract spending in 2020, with a large portion going towards military weapons and equipment. This makes it the biggest source of federal contracts.

Question 8

The combination of inflation and economic stagnation is known as

Accepted Answer

Stagflation is the combination of high inflation and low economic growth. It is a unique economic situation because conventional ways of dealing with inflation, such as raising interest rates, can actually worsen the economic downturn. A depression economy is a severe downturn, usually characterized by high unemployment and a drastic drop in GDP. An inflagnant economy is not a recognized economic term. A recession is a period of economic decline, but it does not necessarily have to involve inflation.

Question 9

What are the tools of economic policy?

Accepted Answer

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Question 10

What are the primary differences between promotional and regulatory policies?

Accepted Answer

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Question 11

How did the Great Depression change how the national government attempts to manage the American economy?

Accepted Answer

The answer of How did the Great Depression change how...

Question 12

At their peak in the 1950s, labor unions represented 35 percent of the workforce. About what fraction of U.S. workers are now represented by unions?

Accepted Answer

As of recent data, union membership in the U.S. has declined significantly, with only about 10% of the workforce being represented by unions, which is approximately one-tenth.

Question 13

The allocation of land grants to farmers and to railroad companies to encourage western settlement is an early example of

Accepted Answer

The allocation of land grants to farmers and railroad companies was a form of government subsidy, as it involved the government providing resources or financial assistance to encourage a specific activity or industry (in this case, western settlement and the expansion of railroads).

Question 14

In what sense do average citizens control private contractors that work for the federal government? Explain the chain of delegation from principal to agent.

Accepted Answer

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Question 15

Describe the government's role in creating the foundation for a market economy.

Accepted Answer

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Question 16

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?

Accepted Answer

The Pentagon used contracting powers to request weapons and surveillance systems from private businesses such as Lockheed Martin after the terrorist attacks of 2001. This allowed them to enter into agreements with private companies to obtain the necessary equipment and services to support their efforts in combating terrorism.

Question 17

What is deregulation? Why did it emerge, and what do you see as its future?

Accepted Answer

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Question 18

How does government make a market economy possible?

Accepted Answer

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Question 19

Discuss the advantages and disadvantages of regressive and progressive tax policies. Which one would you recommend and why?

Accepted Answer

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Question 20

The organization that provides advice to presidents about whether to stimulate or depress the economy (via manipulation of tax and spending policies) is the

Accepted Answer

The organization that provides advice to presidents about whether to stimulate or depress the economy through manipulation of tax and spending policies is the Council of Economic Advisers. This council is made up of three members appointed by the president, who serve as the administration's economic advisors. They provide analysis and recommendations to the president on a range of economic issues, including monetary and fiscal policy, tax reform, and international trade.

Quiz 15: Economic Policy