Deck 16: Economic and Social Welfare Policymaking

Question 1

Keynesian economic policy holds which of the following to be true?

A) Increasing tax rates will stimulate the economy.
B) Government spending should focus primarily on social welfare.
C) The key task for fiscal policy is to stimulate the supply of goods.
D) Government should only stimulate the economy when it is lagging.

Answer 1

D

Question 2

What is the source of money in the Social Security Trust Fund?

A) sales taxes
B) payroll taxes
C) property taxes
D) income taxes

Answer 2

B

Question 3

What is the main purpose of monetary policy?

A) to control the supply of money and credit
B) to control the amount of public debt sold to foreign states
C) to control the interest rates on money lent to foreign states
D) to equalize income disparity among citizens

Answer 3

A

Question 4

Which of the following strategies does monetary policy dictate in inflationary periods?

A) Congress should increase spending.
B) Congress should raise taxes on citizens.
C) The Federal Reserve should lower interest rates.
D) The Federal Reserve should raise interest rates.

Question 5

Which of the following entities is responsible for influencing interest rates in the United States?

A) the Congress
B) the Congressional Budget Office
C) the Executive Office of the President
D) the Federal Reserve Board

Question 6

What is a government program called that provides benefits only to individuals who qualify based on specific needs?

A) an economic stimulus program
B) a regulatory program
C) a discretionary program
D) a means-tested program

Question 7

What can the consumer price index measure?

A) income distribution
B) the gross national product
C) inflation
D) money supply

Question 8

What is a government program called that provides benefits to qualified citizens regardless of need?

A) an economic stimulus program
B) an entitlement program
C) a means-tested program
D) a command-and-control program

Question 9

The unemployment rate is best understood as __________.

A) the rate at which Americans lose their jobs
B) the percentage of Americans who are out of work
C) the percentage of Americans seeking work who are unable to find it
D) the percentage of available jobs per 60,000 households

Question 10

What federal program is designed to provide medical insurance for the very poor in the United States?

A) Medicaid
B) Medicare Part A
C) Medicare Part B
D) Obamacare

Question 11

Which of the following is true about Social Security?

A) It makes transfer payments.
B) It is considered a means-tested program.
C) It is not available to the wealthy.
D) It is entirely supported by property taxes.

Question 12

What type of federal program is Medicaid?

A) discretionary
B) means-tested
C) social insurance
D) entitlement

Question 13

A main goal of fiscal policy is to __________.

A) affect how much money is available to foreign governments for investment
B) use taxes and government spending to help stimulate or slow down the economy
C) determine how much interest the government will pay on the federal debt
D) stimulate the economy by increasing the number of imports into the United States

Question 14

Inflation is best understood as the rate at which __________.

A) gross domestic product expands
B) the money supply expands
C) prices for goods and services increase
D) the federal government increases taxes

Question 15

The percentage of Americans who are seeking work but unable to find it is called __________.

A) the entitlement rate
B) the workforce rate
C) the unemployment rate
D) the underemployment rate

Question 16

Which of the following is an entitlement program?

A) food stamps
B) Medicaid
C) Medicare
D) employer-provided health insurance

Question 17

Who is primarily responsible for making monetary policy in the United States?

A) Congress
B) the president
C) the Department of the Treasury
D) the Federal Reserve Board

Question 18

Laissez-faire economics holds which of the following to be true?

A) The government should raise interest rates during a recession.
B) The government should not intervene in the economy.
C) The government should actively work to reduce unemployment.
D) The government should lower interest rates during a recession.

Question 19

One of the biggest concerns surrounding the Social Security Trust Fund is that __________.

A) the benefits being paid out are too low
B) the payroll taxes are currently too high
C) there will not be enough money to pay future retirees
D) much of the money in the Trust Fund has been embezzled by corrupt politicians

Question 20

An economic theory holding that the supply of money is the key to a nation's economic health and that too much cash and credit in circulation produces inflation is called __________.

A) fiscalism
B) Keynesian
C) monetarism
D) Reaganomics

Question 21

If the Federal Reserve Board wanted to curb inflation,it would most likely __________.

A) raise interest rates
B) lower taxes
C) increase government spending
D) increase exports

Question 22

__________ are cash or in-kind benefits such as food stamps and low-interest college loans that are given by the government directly to individuals.

A) Tax credits
B) Tax deductions
C) Tax expenditures
D) Transfer payments

Question 23

Which group has the highest poverty rate?

A) children under 18
B) Hispanics
C) central-city residents
D) unmarried women

Question 24

What did the Social Security Act of 1935 create?

A) a program to assist some poor Americans that was later called Aid to Families with Dependent Children
B) disability insurance
C) Temporary Assistance for Needy Families
D) unemployment benefits

Question 25

Which of the following would indicate that the economy is experiencing inflation?

A) The cost of groceries is increasing.
B) Goods are becoming less expensive.
C) The federal government is lowering tax rates.
D) The Federal Reserve is increasing the money supply.

Question 26

Which group has the lowest poverty rate?

A) Asians
B) the elderly
C) married couples
D) suburban residents

Question 27

What distinguishes a means-tested program from a social insurance program?

A) A means-tested program extends benefits based on age categories, while a social insurance program provides benefits based on immediate need.
B) A means-tested program only extends benefits to the elderly, while a social insurance program extends benefits to everybody.
C) A social insurance program extends benefits only to the working poor, while a means-tested program extends benefits to everyone, regardless of social class.
D) A social insurance program provides benefits to those who have paid into the program, while a means-tested program provides benefits based on demonstrated need.

Question 28

In an economic slowdown,Keynesian economic policy would advocate increasing __________.

A) taxes
B) government spending
C) the unemployment rate
D) interest rates

Question 29

Upon taking office in 2009,for which of the following did President Obama advocate in order to deal with the economic crisis?

A) lowering interest rates
B) a massive economic stimulus bill
C) increasing middle-class taxes
D) a balanced-budget amendment

Question 30

Of the following countries,which provides the shortest amount of paid parental leave for a two-parent family?

A) France
B) Switzerland
C) Germany
D) the United States

Question 31

When it comes to strengthening the economy,Republicans are more likely than Democrats to prioritize __________.

A) fighting inflation
B) fighting unemployment
C) increasing taxes
D) increasing spending

Question 32

A __________ tax is one by which the government takes a greater share of the income of the rich than of the poor.

A) progressive
B) proportional
C) regressive
D) transfer

Question 33

A __________ tax is one in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers.

A) progressive
B) regressive
C) proportional
D) severance

Question 34

Which of these is most consistent with the philosophy of Keynesianism?

A) interest rate increases by the Federal Reserve Board
B) congressional action to pay off some of its debt
C) a decision by the Federal Reserve Board to increase the money supply
D) increased spending by Congress for roads, bridges, and other infrastructure

Question 35

Increasing inequality in the distribution of income can contribute to a situation known as __________,which is becoming more common in America.

A) the complacency of dependency
B) recessive economics
C) regressive politics
D) relative deprivation

Question 36

U.S. monetary policy involves which of the following?

A) import and export policies
B) interest rates and the money supply
C) NAFTA and the balance of trade with Canada
D) increased government regulations to iron out deficiencies in the free market

Question 37

Which of the following statements regarding the role of the federal government in the economy is correct?

A) The Federal Reserve Board has primary responsibility for setting fiscal policy.
B) Most Americans would prefer an economy completely free of any federal regulations.
C) The scope of federal activity in the economy contracts during economic downturns and expands during economic recoveries.
D) Presidential election outcomes are heavily influenced by the health of the economy.

Question 38

What did the welfare reform law of 1996 implement?

A) Aid to Families with Dependent Children
B) disability insurance
C) Social Security for aged
D) Temporary Assistance for Needy Families

Question 39

According to laissez-faire economic theory,what should the government do during an economic downturn?

A) raise taxes
B) increase government spending on infrastructure projects
C) bail out failing industries that are at the core of our economy
D) nothing

Question 40

If the Federal Reserve Board wanted to slow the rate of economic growth,it would most likely __________.

A) encourage the president to lower taxes
B) increase interest rates
C) increase the money supply
D) lower capital gains rates

Question 41

If you support laissez-faire economic policies,you would generally favor __________.

A) a reduction in the amount of economic regulation by the federal government
B) an increase in the level of taxes assessed by state governments
C) an increase in the amount of economic regulation by the state governments
D) an increase in the tariffs assessed on goods imported into the United States

Question 42

If you subscribe to Keynesian economic policies,you are most concerned with __________.

A) exports
B) unemployment
C) inflation
D) money supply

Question 43

Which of the following is a concern about the Social Security Trust Fund?

A) The rate of Social Security payroll taxes will continue to decrease unless Congress changes the law.
B) The number of current retirees contributing to the fund will continue to decrease as the number of seniors continue to work after traditional retirement age.
C) Soon there will be too few workers contributing to the Trust Fund to support the increasing number of retirees.
D) Soon the Trust Fund will need to pay back the money it borrowed from the general treasury but it does not look like it will be able to repay this loan.

Question 44

The chance that a person will suddenly fall into a much lower income bracket is higher in the United States than it is in most other industrialized countries.

Question 45

Which of the following do Republicans tend to support?

A) demand-side economics
B) government spending to stimulate the economy
C) supply-side economics
D) Keynesian economics

Question 46

If the Fed were to have raised interest rates in the months leading up to the 2012 presidential election,what might have been the expected outcome?

A) The economy would have become stronger.
B) The economy would have weakened further.
C) Imports would have increased.
D) Unemployment would have decreased.

Question 47

What is causing the scope of government to increase?

A) poor economic management by the Federal Reserve board
B) the growth in social welfare spending for programs like Social Security
C) frequent and lingering episodes of inflation
D) increasingly regressive taxes and rising energy costs

Question 48

Which of the following has been the biggest contributor to recent bouts of inflation?

A) the inaugurations of new presidents
B) technological innovations
C) soaring prices for energy
D) wars or other significant military conflicts

Question 49

Which of the following is an example of monetary policy?

A) decreasing federal spending
B) increasing food and drug regulations
C) increasing income taxes on wealthy Americans
D) the Federal Reserve Board buying government bonds

Question 50

The number of people living in poverty has steadily decreased since the establishment of Temporary Assistance for Needy Families in 1996.

Question 51

To what does the text attribute the declining poverty rate among the elderly?

A) the feminization of poverty
B) progressive taxation
C) Social Security
D) supply-side economics

Question 52

Which of the following contributes to the unpopularity of welfare programs in the United States?

A) Americans are generally uncompassionate.
B) Americans tend to think that U.S. welfare programs are not generous enough.
C) Many Americans believe that access to welfare benefits contributes to the flood of immigrants.
D) Welfare programs tend to increase inflation and decrease exports.

Question 53

When it comes to fighting unemployment and fighting inflation,Democrats are more likely to stress the importance of fighting inflation.

Question 54

The number of people on welfare has decreased since 1996,but the number receiving food stamps has increased.

Question 55

Which of these statements best describes the possible effect of efforts by the Federal Reserve Board to lower interest rates?

A) They can lead to lower capital gains tax rates.
B) They can lead to higher unemployment in years of budget deficits.
C) They can spur economic growth by increasing the cost of money for business.
D) They can spur economic growth by increasing the available money supply.

Question 56

How accurate were President Obama's predictions of the impact of the 2009 stimulus plan?

A) Extremely accurate; the unemployment rate dropped as expected.
B) Fairly accurate; the unemployment rate dropped to the level expected, but it took a bit longer than predicted.
C) Somewhat accurate; unemployment peaked at a much higher rate than expected, but it decreased to predicted rates by the time of the 2012 elections.
D) Extremely inaccurate; unemployment peaked at a much higher rate than expected, it decreased much more slowly than predicted, and it still hasn't reached the rate that was predicted.

Question 57

Which of the following most accurately describes the recent financial crisis in the United States?

A) a depression
B) an inflationary cycle
C) a mild recession
D) a severe recession

Question 58

Which of the following is a possible solution to the long-term problem of solvency in the Social Security program?

A) increase benefits for retirees who have substantial income from other sources
B) increase the minimum retirement age
C) revise the inflation adjustment formula for benefits so that recipients would receive more of a raise every year
D) lower the payroll tax contribution

Question 59

What is one of the problems with using official poverty counts?

A) The formula is based on food costs, which have declined relative to other expenses.
B) They tend to underestimate the number of children who live in poverty.
C) They tend to exaggerate the number of women who live in poverty.
D) They tend to overestimate the amount of people in poverty.

Question 60

How does American social welfare policy compare to those of European democracies?

A) Americans have a much lower tax rate than do Europeans, and social welfare benefits are much less generous in the United States.
B) American tax rates are much higher than those of European nations, but the social welfare benefits are higher as well.
C) Social welfare programs are about the same in the United States as in European countries.
D) The United States is truly a "welfare state" by European standards.

Question 61

Congress has the primary responsibility for setting interest rates in the United States.

Question 62

The __________ is the main governmental agency responsible for monetary policy in the United States.

Question 63

Social Security is available to everyone living in the United States,including illegal immigrants.

Question 64

The best way to influence the money supply is through fiscal policy.

Question 65

The official poverty counts tend to overestimate poverty in America.

Question 66

Federal law does not require that employers give any paid leave to employees with a new baby.

Question 67

According to monetarism,too little debt produces inflation.

Question 68

The federal government relies on a __________ tax to fund the Social Security program.

Question 69

The __________ can be used to measure the change in the cost of buying a fixed "basket" of goods and services.

Question 70

The federal unemployment compensation program is known as TANF.

Question 71

The money supply contracts when the Federal Reserve Board increases interest rates.

Question 72

One of the reasons that politicians tread carefully around the issue of Social Security is because elderly Americans have higher voter turnout rates.

Question 73

Elected officials are often unresponsive to the policy preferences of low-income citizens.

Question 74

Currently,more money is being distributed from the Social Security Trust Fund than is being received through taxes.

Question 75

Monetary policy uses the money supply to affect growth in the U.S. economy.

Question 76

All U.S. citizens are guaranteed to receive Medicaid,regardless of their level of income.

Question 77

A(n)__________ program provides benefits to qualified individuals regardless of need.

Question 78

Medicare is an entitlement program.

Question 79

Federal income taxes are progressive.

Question 80

Most economists classify the most recent economic crisis as a depression.