Deck 3: The Economy: Changing Government-Business Relationships

Question 1

Which of the following is a FALSE assumption about Class Action Lawsuits?

A) It is fairly easy to locate and notify members of the class
B) They are a major means of accomplishing regulations
C) They are each to pursue
D) all of the above

Answer 1

D

Question 2

Which program was NOT created during President Roosevelt's first 100 days in office?

A) Security and Exchange Commission
B) Civilian Conservation Corps
C) Federal Trade Commission
D) National Industrial Recovery Act

Answer 2

C

Question 3

Proponents of free-market capitalism favor

A) interference of government in the economy
B) more equal distribution of wealth among citizens
C) non-interference of government in the economy
D) government ownership of enterprise

Answer 3

C

Question 4

Which of the following is NOT an assumption underlying market theory?

A) Human beings are motivated by economic wants.
B) Prices are set by government.
C) People have perfect information on which to make rational economic choices.
D) There is perfect competition.

Question 5

Business regulation and business subsidy programs are examples of microeconomic policy.

Question 6

Which of the following is NOT a positive feature of the free market system?

A) competition
B) efficiency
C) productivity
D) market failure

Question 7

The move to curtail the extensive government oversight of private firms during the 1980's is called _____.

A) Privatization
B) Nationalization
C) Cartelization
D) Deregulation

Question 8

Globalization of the economy has poised a particular challenge to US businesses. ___________ lost an appeal of a 2004 European Commission antitrust decision

A) AT&T
B) Microsoft
C) BellSouth
D) Google

Question 9

Economic systems can roughly be divided into two extreme alternatives: free enterprise, also known as _______, and public ownership, also known as _________.

A) capitalism; socialism
B) Fascism, Communism
C) Communism; Democracy
D) free world; non-free world

Question 10

Enterprise zones adopted during the Clinton administration provide the following benefits except for

A) reduced taxes.
B) tax credits.
C) increased regulations
D) technical assistance

Question 11

President Roosevelt's economic policies were influenced by

A) Kenneth Galbraith
B) John Maynard Keynes
C) Milton Friedman
D) Adam Smith

Question 12

President Hoover's administration's raising income taxes and balancing the budget fixed the problems created by the Great Depression.

Question 13

In microeconomic policy, which of the following is/are highly influential?

A) President
B) Congress
C) Federal Reserve Board
D) all of the above
E) (A) and (B)

Question 14

In the welfare-state capitalism system, allocation of goods and services, and frequently prices are largely planned, but the major means of production are in private hands and run for profit

Question 15

Proponents of free market capitalism justify it on the grounds that private ownership of firms provides

A) incentives for production
B) state-owned economic entities
C) monopolistic gains
D) incentives for price control

Question 16

Which of the following is NOT a type of microeconomic policy?

A) antitrust
B) changes in the federal funds rate
C) regulation of specific industries
D) government-owned enterprises

Question 17

The American economy is predominantly

A) socialist
B) mercantilist
C) market capitalist
D) government regulated

Question 18

Which of the following categories is NOT a focus of microeconomic policy?

A) Antitrust Policy
B) Government Promotion of Business
C) Fiscal Policy
D) Regulation of Specific Business Sectors

Question 19

Microeconomics is concerned with

A) overall management of the economy
B) government regulation of specific types of business
C) control of the money supply
D) management of the national debt

Question 20

Which of the Following is NOT an example of an Independent Regulatory Commission (IRC)?

A) Federal Communications Commission (FCC)
B) Central Intelligence Agency (CIA)
C) Federal Trade Commission (FTC)
D) Securities and Exchange Commission (SEC)

Question 21

Liberal, consumer-oriented critics of economic regulation have complained that the federal regulators often are dominated by the industries that they regulate.

Question 22

The socialist economic system is based on the assumption that economic wealth should be fairly equally distributed among the population.

Question 23

Antigua & Barbuda filed complaints against the United States under WTO because of restrictions on

A) steel imports
B) horse racing
C) internet gambling
D) farm export

Question 24

______________ requires that agencies and their programs be given specific periods of existence and be reviewed at the end of the time allotted.

A) Consumer oversight
B) Deregulation
C) Regulation
D) Sunset legislation
E) Community revitalization

Question 25

Supporters of GATT argue that the agreement

A) opens new markets for US construction firms, architects and engineers
B) reduces jobs in USA
C) lowers wages for American workers
D) (A) and (B) only
E) none of the above

Question 26

The ______________ was created by Congress to stem the development of monopolies and prevent practices that would lead to unfair competition.

A) General Agreement on Tariffs and Trade
B) Federal Trade Commission
C) Treasury Department
D) Free market
E) Fairness in Business Act

Question 27

One area that the government refuses to regulate is the environment.

Question 28

Nationalization involves government bureaucracy operating economic enterprises directly. An example of a nationalized US enterprise is:

A) National Public Radio
B) Healthcare
C) Amtrak
D) Local and long distance communications
E) Safety screening at airports

Question 29

The Federal Trade Commission (FTC) is responsible for ensuring free and undistorted markets.

Question 30

The current conservative approach to deregulation relies primarily on

A) program evaluation of major public policies
B) performance reviews of important government agencies
C) reducing government spending to stifle regulations

Question 31

The use of risk subsidies is another way government supports economic enterprise. These enterprises received subsidies except for

A) sugar producers
B) health care insurance
C) financial institutions
D) Ford motor company

Question 32

The Federal Trade Commission has trouble enforcing antitrust policy because of

A) its small staff and budget
B) congressional interference
C) lengthy appeals procedures
D) all of the above

Question 33

Ralph Nader and his Center for the Study of Law in the Public Interest and the American Bar Association both issued reported critical of which federal agency because of its timidity and unresponsiveness to consumers

A) Environmental Protection Agency
B) Federal Trade Commission
C) Federal Deposit Insurance Corporation
D) Transportation Security Administration

Question 34

Antitrust policy addresses which of the following types of market distortions?

A) Monopolies
B) Current Account Deficits
C) Capital Flight
D) Trade Deficits

Question 35

The number and size of corporate mergers and acquisitions increased rapidly during the 1990s.

Question 36

Industry complains that government regulation impacts its operations in the following way, except for

A) interferes with its capacity to operate efficiency in a free society
B) paperwork is manageable and easily dealt with
C) red tape and complex regulation make compliance impossible
D) regulatory agencies have become pervasive all economic areas

Question 37

NAFTA was enacted by Congress in November 1993, creating a free trade area among

A) USA, Canada and Brazil
B) USA, Canada and Mexico
C) USA, Mexico and Brazil
D) USA, Argentina and Brazil

Question 38

Deregulation has

A) resulted in higher airline fares
B) reduced interest rates that banks can pay
C) reduced crowding at hub airports
D) given airlines and truckers greater flexibility in routes
E) improved transportation services to small towns

Question 39

Antitrust policy aims at

A) preventing one firm or a small number of firms from dominating a particular market.
B) decreasing cynicism about politicians.
C) improving the trustworthiness of individuals.
D) (a) and (b)

Question 40

These countries have had trade restrictions imposed them by the United States Governments as a result of the Omnibus Trade Act of 1988

A) Japan, Canada and Mexico
B) Germany, Mexico and South Korea
C) China, Canada and Japan
D) Japan, India and China

Question 41

The US government stimulated the economy through public investments such as:

A) Land grants to railroads
B) Land grants to states to establish educational
C) Construction of roads and canals through government subsidies
D) All of the above