Deck 13: Making Domestic Policy

Question 1

As of 2009, the national debt was over _____ trillion dollars.

A) 6
B) 7
C) 8
D) 9
E) 10

Answer 1

8

Question 2

In June 2010 the Congressional Budget Office reported that our debt is bigger than ___ percent of everything the nation produces and sells.

A) 20
B) 30
C) 40
D) 50
E) 60

Answer 2

60

Question 3

After World War II, it was clear that the countries divided into market-based and state-run areas

A) enjoyed equal success in both areas.
B) enjoyed moderate success in state-run areas.
C) enjoyed moderate success in market-based areas.
D) experienced vastly greater performance in state-run areas.
E) experienced vastly greater performance in market-run areas.

Answer 3

experienced vastly greater performance in market-run areas.

Question 4

There is evidence to suggest that when inflation is up, voters tend to

A) vote for Independent candidates.
B) vote for Democratic candidates.
C) vote for Republican candidates.
D) vote for the party in power.
E) vote for incumbents.

Question 5

The Federal Reserve Board is characterized by all the following except

A) it has seven members nominated by the president and confirmed by the Senate.
B) its members serve fourteen-year terms.
C) the chair of the board is designated by the Senate.
D) a goal of the board is to keep prices stable, avoiding inflation.
E) a goal of the board is to keep prices stable, avoiding deflation.

Question 6

The Federal Reserve System is composed of

A) the Federal Reserve Board and the twelve federal reserve banks around the nation.
B) the Federal Reserve Board, the Secretary of the Treasury, and the head of the council of economic advisers.
C) the Federal Reserve bank leaders and the president's top economic adviser.
D) the president, the Federal Reserve Board chair, the Secretary of the Treasury, and other top officials invited to serve by the president.
E) the president, members of the Senate commerce committee, and the chair of the Federal Reserve Board.

Question 7

If the Fed cuts rates too much,

A) people will take out foolish loans and prices may go up.
B) investments will slow down.
C) people will be reluctant to take out loans.
D) new jobs will not be created.
E) prices will go down.

Question 8

Citizens' tax bills in the United States are __________ those of many other Western democracies.

A) higher than
B) about the same as
C) lower
D) incomparable with (because so little of our economy is government-owned)
E) incomparable with (because so little of our economy is based on industry)

Question 9

Which of the following nations has the lowest tax burden?

A) France
B) Sweden
C) Germany
D) Canada
E) United States

Question 10

The late Senator Russell Long highlighted the problem with taxes by suggesting that Congress taxes

A) "when the lights are on, but no one is paying attention."
B) "at will, but in secret."
C) "anything, but not everything."
D) "the scary snow man."
E) "the fellow behind that tree."

Question 11

Currently, the Social Security tax is approximately _____ percent.

A) 3
B) 7
C) 12
D) 20
E) 26

Question 12

High-earners who retire now receive about __________ per month via Social Security.

A) $800
B) $1,100
C) $1,800
D) $2,100
E) $4,300

Question 13

In political jargon, Social Security is often referred to as

A) "the chair."
B) "the last hill."
C) "the third rail."
D) "the wall."
E) "the toaster."

Question 14

In 2001, a bipartisan commission that studied Social Security recommended

A) voluntary personal retirement accounts.
B) raising the retirement age.
C) raiding the Social Security tax.
D) reducing benefits.
E) eliminating it entirely.

Question 15

When Medicare was passed in 1965, its sponsors said it would cost about ____ a year.

A) $12 million
B) $50 million
C) $100 million
D) $ 1 billion
E) $12 billion

Question 16

In countries where the government manages health care and pays all the costs,

A) health care costs do not increase at the same rate as they do in the United States.
B) patients experience little or no delay in treatment and services.
C) the development of new technologies is strongly encouraged.
D) physicians have to deal with much less red tape.
E) infant mortality is higher.

Question 17

The new health care plan of 2010 was passed by the House and Senate

A) with support from Republicans and Democrats alike.
B) without a single Republican vote.
C) with unanimous support from Democrats.
D) with a few key Republican votes.
E) with huge popular support.

Question 18

When we speak of a policy that has widely distributed costs and benefits, we speak of

A) entrepreneurial politics.
B) client politics.
C) interest-group politics.
D) majoritarian politics.
E) cost/benefit politics.

Question 19

A proposed subsidy will benefit the dairy industry but increases the cost of milk nationwide. What type of politics is most likely involved?

A) Entrepreneurial politics
B) Client politics
C) Interest-group politics
D) Majoritarian politics
E) Monetary politics

Question 20

The reason client groups usually win in client politics is that

A) nobody else stands to lose enough to make it worthwhile to fight the policy.
B) pork barrel politics is not involved.
C) too many people stand to win under the policy for it to encourage strong dissent.
D) even policy entrepreneurs usually support the policies.
E) members of Congress can rarely resist the economic incentives to regulate.

Question 21

Members of Congress dislike interest-group politics because

A) it forces them to take sides between evenly matched groups.
B) political parties play a big role, which interferes with their independence.
C) political action committees are seldom involved, and thus they have little to gain in terms of campaign contributions.
D) a policy's outcome is usually decided before it reaches them.
E) party leaders would rather appear positive.

Question 22

A key requirement for a policy entrepreneur to be successful is

A) strong partisan support.
B) the ability to work behind the scenes and avoid attracting publicity.
C) support of a corporate sponsor, like General Motors.
D) a talent for leadership.
E) influence with congressional committee staff.

Question 23

One key concern for entrepreneurial politics is the possibility that

A) agencies do not have a single administrative head.
B) the media will give much attention to individual efforts.
C) the perceived benefits far outweigh the costs.
D) interest groups can confuse policy in such a way that the public no longer cares.
E) policy can be captured by the very client firms it sets out to regulate.

Question 24

No single explanation of policy making is correct because

A) majorities in Congress can be produced by any one of the four types of politics.
B) the Supreme Court always has the last word.
C) no one knows what goes on behind the closed doors of Congress.
D) the public's reaction to an issue cannot be predicted.
E) policy publics are usually slower than elites in formulating ideas.

Question 25

The national debt is the total of all debts the government has accumulated over the years.

Question 26

The government basically pays the interest on the national debt each year.

Question 27

Federal interests payments require about 22 percent of the gross domestic product.

Question 28

Liberals prefer to address the deficit by raising taxes.

Question 29

While conservatives and liberals focus on taxes and spending, the typical American is more concerned about eliminating waste.

Question 30

The federal government can act to ensure the health of the economy.

Question 31

It is ironic that the president is judged by the state of the economy because this is an area over which the chief executive has little control.

Question 32

The economic policy tools of the U.S. government are numerous and powerful.

Question 33

Even employed people are hesitant to support the president when unemployment figures are high.

Question 34

There is some evidence that when unemployment is up, people are more likely to vote for Democratic candidates.

Question 35

The CEA and the CBO cannot predict very far in advance the size of the federal deficit.

Question 36

The Federal Reserve Board is appointed by the president and confirmed by the Senate.

Question 37

Taxing and spending decisions are called fiscal policy.

Question 38

Americans pay much higher taxes than citizens do in other democracies.

Question 39

Individuals who earn over $250,000 a year pay nearly half of all income taxes collected.

Question 40

Under the Constitution, it is hard to create a new program.

Question 41

Medicare was created in the 1930s.

Question 42

Today, there are about forty-two workers paying taxes for every beneficiary of Social Security.

Question 43

The current Social Security tax is 23.5 percent of what an employee earns.

Question 44

Today, people only pay Social Security taxes on only the first $97,500 of what they earn.

Question 45

A bipartisan report just before the terrorist attacks of 2001 recommended voluntary personal retirement accounts to supplement Social Security benefits.

Question 46

The new health care plan which was passed in 2010 penalizes people who do not buy health insurance.

Question 47

A small but identifiable group pays the costs in majoritarian policies.

Question 48

Social Security and Medicare are good examples of majoritarian politics.

Question 49

Today, there are about three workers paying into Social Security for every single retiree.

Question 50

Subsidies paid to farmers and dairies are classic examples of client politics.

Question 51

Many tax shelters are also examples of client politics.

Question 52

Interest-group politics have become less common in American politics.

Question 53

Members of Congress generally don't like interest-group politics.

Question 54

In entrepreneurial politics a coalition claims to speak on behalf of a large number of people who would benefit from a policy that imposes heavy costs on some small group.

Question 55

Ralph Nader is an example of a client-group leader.

Question 56

Majorities in Congress can be produced by any one of the four types of policy-making coalitions.

Question 57

What are the three tools that the Federal Reserve Board uses to implement its monetary policy?

Question 58

Identify five possible solutions that are discussed in the text with regard to the Social Security problem.

Question 59

Identify and describe four types of policy in terms of perceived benefits and costs.