Deck 15: Extension 1: Focus On: Economic Policy

Question 1

What is the key difference between a progressive tax and a regressive tax?

A) income levels
B) level of education
C) occupation
D) the president's party

Answer 1

A

Question 2

A period of prolonged high unemployment with a period of decline in the gross national product (GNP) is called __________.

A) a recession
B) a depression
C) inflation
D) stagflation

Answer 2

B

Question 3

Classical economists would agree that the market adjusts itself __________.

A) without government action
B) only with government action
C) if business is socialized
D) without looking at unemployment

Answer 3

A

Question 4

Even in a "full employment" economy, __________ percent of the labor force will be out of work.

A) zero
B) 1 to 2
C) 3 to 5
D) over 6

Question 5

The mixture of the public and private economic sector depends on what?

A) the absence of governmental regulations
B) Keynesian economics.
C) government spending and taxing
D) socialized medicine and education

Question 6

Concerning economic policy, the U.S. Constitution __________.

A) specifies using a mixed economic system
B) gives the government a wide range of powers
C) makes it impossible for the country to borrow money
D) disallows the federal government from taxing income

Question 7

What kind of economy has individuals and corporations own its capital or productive capacity, businesses, factories, and farms?

A) socialist
B) capitalist
C) Communist
D) mixed

Question 8

What does the United States have in common with virtually every other country?

A) a pure capitalist economy
B) a socialist economy
C) a mixed economy
D) labor unions with socialist tendencies

Question 9

During the New Deal era, Roosevelt and Congress cut government spending and __________.

A) it helped the United States out of the Great Depression
B) established a short-lived socialist society
C) followed Keynesian economics
D) impeded the government from entering World War II

Question 10

The 2008 bailout, in which the U.S. government gave money to several large banks to prevent them from failing, is an example of what happens in __________.

A) a mixed economy
B) a pure capitalist economy
C) a Communist economy
D) a socialist economy

Question 11

The United States can be described as a __________ economy, with both private and government ownership.

A) socialist
B) Communist
C) capitalist
D) mixed

Question 12

The U.S. government could not legally tax its citizens' income until the ratification of the __________.

A) first draft of U.S. Constitution
B) 3rd Congress' federal budget
C) New Deal
D) Sixteenth Amendment

Question 13

The idea that the government can stimulate the economy by increasing spending in a time of high unemployment and cutting spending in times of low employment is associated with which economist?

A) Karl Marx
B) John Maynard Keynes
C) Adam Smith
D) Warren Buffett

Question 14

During the nineteenth century, the U.S. government focused on encouraging economic expansion and development by __________.

A) creating the Tennessee Valley Association
B) supporting canal and later railroad construction
C) instituting the Federal Deposit Insurance Corporation
D) the annexation of Texas under President Zachary Taylor

Question 15

When the 2009 congressional stimulus package ended, it was deemed a failure because __________.

A) it did not include tax breaks
B) state and local governments laid off workers
C) it resulted in a long-term boost in employment
D) it was larger relative to the size of the economy

Question 16

Capitalism __________ promote(s) equality of opportunity.

A) never
B) may not
C) always
D) refuses to

Question 17

What eventually pulled the United States out of the Great Depression?

A) U.S. entry into World War II
B) the Lend Lease program
C) the New Deal programs
D) the free hand of the market

Question 18

During the 1930s, the New Deal helped __________.

A) increase regulation of wages
B) deregulate the food and drug industry
C) raise money for World War II
D) remove government from the economic arena

Question 19

How does one realize an economic depression has taken place?

A) significant oil price hikes
B) an increase in GDP
C) prolonged high unemployment
D) government intrusion in the economy

Question 20

The U.S. government currently owns dams, railroads, numerous resources, and __________ percent of all the land in the country.

A) 13
B) 29
C) 57
D) 42

Question 21

What is an effect of deflation?

A) rising wages
B) job creation
C) a change in interest rates
D) decreasing prices

Question 22

When the GDP has declined for two or more consecutive quarters, this economic time is known as a(n) __________.

A) depression
B) recession
C) inflation
D) misery index

Question 23

How does a mixed economy work?

Question 24

In the 1920s, Germany issued a new currency because the trillions of old German marks it had printed became worthless due to __________.

A) a recession
B) hyperinflation
C) a depression
D) Nazism

Question 25

What is included under discretionary spending?

A) Medicare
B) interest on the debt
C) national parks
D) government subsidies

Question 26

How do we calculate the national debt?

A) federal spending minus federal revenues in a single year
B) the amount of taxation subtracted from the GDP
C) accumulating all annual budget deficits
D) collective income minus the amount of taxes paid

Question 27

The U.S. government measures the sum of the unemployment rate and the inflation percentage in order to establish __________.

A) the misery index
B) the gross domestic product
C) the unweighted unemployment rate
D) an official agency index

Question 28

The only way Congress can affect mandatory spending is __________.

A) through oversight
B) with bureaucratic instruction
C) by amending the laws
D) through presidential order

Question 29

Taxes in the United States claim just over 30 percent of the GDP. Most western industrialized nations have tax revenues that are a(n) __________ share of GDP.

A) higher
B) smaller
C) even
D) great deal lower

Question 30

When was the Great Recession?

A) 1929-1941
B) 1973-1980
C) 1992-2000
D) 2008-2012

Question 31

Some Americans favor a tax code that does not favor one kind of economic activity over another. What kind of taxation policy would they support?

A) a regressive tax
B) a progressive tax
C) tax neutrality
D) tax exemption

Question 32

State and local governments spend about __________ percent of the GDP.

A) 5
B) 7
C) 10
D) 15

Question 33

What is inflation?

A) prices for goods rise
B) purchasing power rises
C) the Federal Reserve raises interest rates
D) when the Euro interacts with the U.S. dollar

Question 34

How can one tell the difference between a depression and a recession?

Question 35

If the federal government spends more than it takes in as revenue in a single year, it adds to the __________.

A) U.S. revenue
B) company profits
C) the country's deficit
D) investment it makes in America

Question 36

The economic cycles of boom and bust have been constant, but the U.S. government did not try to prevent these cycles until what decade?

A) 1820s
B) 1860s
C) 1910s
D) 1930s

Question 37

What is Keynesian economics?

Question 38

The pay-as-you-go system was established under which president?

A) Ronald Reagan
B) George H.W. Bush
C) Bill Clinton
D) Barack Obama

Question 39

"Reaganomics" is the popular name of what economic policy advocated by the White House during the 1980s?

A) tax neutrality
B) supply-side economics
C) demand-driven economics
D) trickle-up economics

Question 40

In what ways can Congress create more revenue?

A) stimulus packages
B) slashing domestic programs
C) taxes and fees
D) borrowing money

Question 41

What is the difference between discretionary and mandatory spending?

Question 42

What is the "misery index"?

Question 43

Explain instances where the economy can be (or has been) used as a salient issues in a campaign.

Question 44

What is supply-side economics?

Question 45

How was the U.S. economy and the federal government budget used as an issue in the 2012 presidential election?

Question 46

Give three (3) examples of where the federal government spends money.

Question 47

What are the differences between a budget deficit and a debt?

Question 48

Describe the partisan debate over revising the U.S. tax code.

Question 49

Define and give examples of progressive and regressive taxes. How would you describe our current federal income tax?

Question 50

Explain why changing the tax code is so difficult.