Deck 15: Government, the Economy, and Domestic Policy

Question 1

The Sherman Antitrust Act (1890) was designed to maintain capitalism by prohibiting the development of ___.

A) social insurance programs
B) monopolies
C) taxes
D) None of the above.

Answer 1

B

Question 2

All of these are major steps in the congressional budget preparation EXCEPT ___.

A) Congress receives the president's budget
B) Budget committee reports concurrent resolution on the budget to each house.
C) Agencies build their budgets in line with the president's guidelines.
D) CBO reports to the Budget committee on the fiscal outlook, budget priorities, and how they relate to the president's budget.

Answer 2

C

Question 3

What was the second phase of economic management in the history of state-economy intervention in American political development?

A) The rise of economic regulation
B) The growth of the welfare state and macroeconomic regulation
C) Building the economic infrastructure
D) none of the above.

Answer 3

A

Question 4

During what period in the history of economic management did the New Deal occur?

A) During the growth of the welfare state and macroeconomic regulation
B) The rise of economic regulation
C) Building the economic infrastructure
D) Both of the first two options

Question 5

Who was the prime architect of the first national plan for the American economy?

A) George Washington
B) Alexander Hamilton
C) James Madison
D) Thomas Jefferson

Question 6

The earliest American colonies organized as ___.

A) corporations
B) sector economies
C) economies of scale
D) joint stock companies

Question 7

What are the three types of economic management policies?

A) Business, corporate, and individual
B) Individual, aggregate, and unit
C) Fiscal, monetary, and regulatory
D) Distributive, re-distributive, and regulatory

Question 8

Which of the following options present two distinct perspectives on how government can and should use policy to promote a healthy economy?

A) Traditional conservatism and Keynesianism
B) Supply-side economics and monetarism
C) The New Economy and traditional conservatism
D) All of the above

Question 9

The administration of which president is associated with "the New Economy" perspective on economic policy?

A) Bill Clinton
B) George W. Bush
C) Barack Obama
D) All of the above

Question 10

Which economist is often called the "father of monetarism"?

A) Arthur B. Laffer
B) John Maynard Keynes
C) Milton C. Friedman
D) Adam Smith

Question 11

Which institution of economic policymaking is an independent regulatory commission?

A) The Office of Management and Budget
B) The Treasury Department
C) The Federal Reserve Board
D) The National Economic Council

Question 12

What was the OMB originally called when it was a part of the Treasury Department; and how was it created?

A) The Bureau of the Budget; created by the Budget and Accounting Act of 1921
B) The Council of Economic Advisers; established by the Executive Reorganization Act of 1939
C) The National Economic Council; established by executive fiat in the Nixon administration
D) None of the above

Question 13

What is a corporation?

A) A legal (as opposed to physical) person that has the same economic rights as a physical person but that is also composed of shareholders who are liable only up to the amount of their personal investments
B) A legal (as opposed to physical) person that has the same economic rights as a physical person but that is also composed of shareholders who are liable for all credits and deficits of the entity
C) A legal (as opposed to physical) person that has the same social rights as a physical person but that is also composed of shareholders who are liable only up to the amount of their social capital investments
D) None of the above

Question 14

What is a monopoly?

A) The most successful firm in a competitive market
B) An economic condition where a single producer controls the market
C) An economic condition where a few producers control the market
D) An economic condition where no single or group of producers control the market

Question 15

What was the New Deal?

A) LBJ's economic and social programs of the 1960s
B) Truman's domestic social and economic program proposals of the 1940s
C) FDR's policies and programs intended to address World War II
D) FDR's policies and programs intended to address the Great Depression

Question 16

What is fiscal policy?

A) Government policies focused on the supply of money and interest rates
B) Government policies about taxing, spending, budgets, deficits, and debt
C) Government policies regarding revenue raising and spending
D) Both of the last two options

Question 17

What is regulatory policy?

A) Legislation and bureaucratic rules that affect the performance of individual businesses and the economy in general
B) Economic laws exclusively
C) Executive rules regarding the economy exclusively
D) All of the above

Question 18

Where do traditional conservatives stand on the issue of taxes?

A) They support higher taxes
B) They oppose taxation of any kind
C) They support lower taxes
D) None of the above

Question 19

What, according to Keynesians, is usually the appropriate government response during bad economic times?

A) Government should spend less
B) Government should spend more
C) Government should decrease taxes
D) Both of the last two options

Question 20

What is supply-side economics?

A) A policy perspective that emphasizes increasing regulation in order to promote consumption as a means to creating an increased supply of goods and services
B) The decreasing of taxes, among other things, in order to improve the business climate, encourage new investment, and expand output
C) Both of the above
D) None of the above

Question 21

Keynesians attempt to manage the economy by addressing what aspect of it?

A) Demand
B) Supply
C) Interest rates
D) All of the above

Question 22

Monetarists tend to promote the use of monetary policy for controlling the business cycle. What do Keynesians normally promote instead?

A) They also promote the use of monetary policy
B) They promote the use of fiscal policy
C) They promote the use of supply-side policy
D) They promote the use of kinesiological policy

Question 23

The textbook author suggests that the George W. Bush administration operated from a supply-side perspective on taxes, but what other perspective on spending?

A) Keynesianism
B) Monetarism
C) Traditional Conservatism
D) None of the above

Question 24

How does the Federal Reserve Board manage the nation's money supply?

A) By not setting specific reserve requirements and using a flexible discount rate
B) By setting specific reserve requirements and establishing the discount rate
C) By prescribing specific fiscal policies
D) By setting business sector regulatory policies

Question 25

The Council of Economic Advisers (CEA) was established by an act of Congress. What established the National Economic Council (NEC)?

A) The same act of Congress, the Employment Act of 1946
B) A different act of Congress, the Employment Act of 1993
C) By executive order in the W. Bush administration
D) By executive order in the Clinton administration

Question 26

Two institutions are primarily involved in the budget preparation process today. The one found in the legislative branch is the Congressional Budget Office; what is the other one that is found in the executive branch?

A) The Office of Management and Budget
B) The Council of Economic Advisers
C) The National Economic Council
D) The Bureau of the Budget

Question 27

Today most federal revenue comes from what kind of taxes?

A) Excise taxes
B) Corporate income taxes
C) Impost taxes
D) Individual income taxes

Question 28

From 1960 to 2000, discretionary spending on national defense was subject to which of these trends?

A) It increased
B) It decreased
C) It remained the same
D) None of the above

Question 29

Mandatory spending on health programs (e.g. Medicare and Medicaid) has been subject to what trend since 1970?

A) It has increased
B) It has decreased
C) It has remained the same
D) None of the above

Question 30

Income taxes are ___.

A) regressive
B) progressive
C) flat
D) Both the last two of the above

Question 31

Medicaid is a social insurance program.

A) Yes, just like social security
B) No, it is a means-tested program

Question 32

What problem is Social Security facing in the future?

A) There is no problem
B) In the future there will be a significant reduction in the ratio of workers to retirees drawing benefits
C) In the future there will be a significant increase in the ratio of workers to retirees drawing benefits
D) None of the above

Question 33

Which one of the following outcomes did NOT result from the congressional Republican's attempt to "repeal and replace" Obamacare in 2017?

A) Republicans failed twice to repeal Obamacare.
B) Republicans managed to repeal the individual mandate of Obamacare.
C) Republicans succeeded in their effort to repeal all of Obamacare.
D) None of the above

Question 34

Congress's consideration of the FY 2019 budget is supposed to be finished by summer 2018 so that the budget can begin on October 1, ___.

A) 2018
B) 2019
C) 2020
D) 2021

Question 35

The tax reform bill signed into law in 2017 is set to _______the federal deficit by $1.5 trillion over the first ten years.

A) reduce
B) increase
C) have no effect on
D) None of the above

Question 36

The tax reform bill, passed in 2017, ___.

A) delivered deep and permanent cuts in both the corporate and individual income tax rates
B) delivered deep and permanent cuts in the corporate income tax rate and more modest and temporary cuts to individual income tax rates
C) delivered modest and temporary cuts in both the corporate and individual income tax rates
D) delivered modest and temporary cuts in the corporate income tax rate and deeper and permanent cuts to individual income tax rates

Question 37

In 2016, Americans spent about _______per person on health care.

A) 4000
B) 6000
C) 8000
D) 10000

Question 38

In 2019, _______million Americans were without health insurance.

A) 8
B) 18
C) 28
D) None of the above, since all Americans had health insurance

Question 39

In the United States, top business executives make _______times the average salary their workers.

A) 7
B) 75
C) 175
D) 275

Question 40

The accumulation of annual deficits over the years is referred to as the ___.

A) annual budget
B) national debt
C) trade deficit
D) exchange rate

Question 41

In _______the Constitution authorizes the federal government both to engage in deficit spending by borrowing money.

A) Article I,section 8,
B) Article II,section 4,
C) Article III,section 1,
D) None of the above, since the Constitution requires the federal government to operate only a balanced budget

Question 42

By 2023, the national debt is expected to exceed ___.

A) $25 million
B) $25 billion
C) $25 trillion
D) $25 quadrillion

Question 43

State and local governments provide _______percent of public funds for education.

A) 30
B) 50
C) 70
D) 90

Question 44

The federal budget is prepared in two major phases; the first occurs in the _______branch, the second in the _______branch.

A) legislative
B) judicial
C) gubernatorial
D) executive

Question 45

Preparation of the fiscal year (FY) 2019 budget began in the executive branch in the spring of _______so that it could be delivered to Congress for consideration early in ___.

A) 2017
B) 2018
C) 2019
D) 2020

Question 46

In 2016, Americans spent about _______per person or a total of _______on health care.

A) $2.2 trillion
B) 5000
C) $3.3 trillion
D) 10000

Question 47

Medicare serves about _______million beneficiaries at a cost of _______almost annually.

A) 85
B) 58
C) $672 billion
D) $276 billion

Question 48

During the coronavirus pandemic and economic collapse of 2020, most financial analysts were _______in order to ___.

A) reluctant to explode deficits
B) not concerned about rising deficits
C) stimulate the economy and spur job creation
D) reduce the rate of inflation of an overheated economy

Question 49

In 2018, Americans spent ___or a total of _______on health care.

A) over $11,000 per person
B) $3.6 trillion
C) over $21,000 per person
D) $3.6 billion

Question 50

The federal reserve is primarily responsible for managing the nation's money supply.

Question 51

The Office of Management and Budget assists in the development of a unified executive branch budget.

Question 52

The highest tax rate is over 40%

Question 53

Government spending, measured as the percent of the economy accounted for by government outlays, is higher in the United States than in nearly all other advanced industrial nations.

Question 54

Between 1943 and 1964, Americans with the highest incomes faced individual income tax rates greater than 90 percent?

Question 55

The Council of Economic Advisers (CEA) has independent economic policymaking authority.

Question 56

Progressive taxes are designed to assure that the wealthy pay a higher amount of money in taxes than the poor. Thus, flat taxes are also a type of progressive tax.

Question 57

In 2017 Republican congressional majorities tried twice to "repeal and replace" Obamacare, but failed both times.

Question 58

The federal budget is prepared in two major phases; the first occurs in the legislative branch, the second in the executive branch.

Question 59

In 2019, 28 million Americans were without health insurance.

Question 60

Despite a frustrating first year for President Trump and the Republican majorities in both houses of Congress, a major tax reform program passed late in 2017.

Question 61

The tax reform bill signed into law in 2017 will reduce the federal deficit by $1.5 trillion over the first ten years.

Question 62

Unlike most state governments, the federal Constitution allows deficits and debt.

Question 63

In what ways are corporations similar to individual citizens under the law?

Question 64

Describe the events leading to the passage of the Employment Act of 1946.

Question 65

What are the key differences between Monetarism and Keynesianism?

Question 66

Consider a federal agency with a mission that you strongly believe in, compose a rational for a budget increase that might satisfy a Tea Party backed legislator.

Question 67

How did the No Child Left Behind project impact federal spending on education?

Question 68

Which type of taxation scheme is preferable: progressive, regressive, flat, or some combination? Be sure to use primary evidence drawn from the text in formulating your argument.

Question 69

Which type of economic management perspective-traditional conservatism, Keynesianism, monetarism, supply-side or New Economy-do you prefer and why? Be sure to use primary evidence drawn from the text in support of your argument.

Question 70

Discuss the evolution of economic management in this country during the twentieth century.

Question 71

As completely yet succinctly as possible, discuss the supply-side economics perspective on economic policymaking.

Question 72

As completely yet succinctly as possible, discuss the Keynesian perspective on economic policymaking.

Question 73

Is the distribution of income in America fair? Remember to use evidence garnered from the text in support of your argument.

Question 74

Discuss the positive and negative effects that tax cuts have on the national debt and the economy.

Question 75

How has the role of government in relation to the economy changed over the course of American political history?

Question 76

What roles do fiscal, monetary and regulatory policy play in economic policy-making?

Question 77

What are the key institutions of economic management at the national level, and what are their respective roles?

Question 78

What roles do the president and Congress play in producing the federal budget each year?

Question 79

What problems afflict the social security program and what reforms have been proposed?