Deck 17: Economic Policy

Question 1

The spokespeople for Occupy Wall Street stated that higher education was a

A)federal imperative.
B)state responsibility.
C)governmental duty.
D)human right.

Answer 1

D

Question 2

In May 2010, President Obama signed a new plan into law that would

A)provide direct loans to college students.
B)increase federal subsidies to private student loans.
C)make private student loans illegal.
D)replace student loans with expanded grant programs.

Answer 2

A

Question 3

One of the most important jobs a president, senator, or representative does for his/her constituency is

A)planning for social welfare programs.
B)providing for economic opportunities.
C)preparing a fair and equitable tax system.
D)fairly assessing and collecting tax revenues.

Answer 3

B

Question 4

The efforts of government to regulate and support the economy in order to protect and expand citizens' financial well-being and economic prospects, as well as supporting businesses in the global financial system, is best defined as

A)fiscal policy.
B)economic policy.
C)domestic policy.
D)social welfare policy.

Question 5

Fearing a backlash against his administration's continuing bailout of Wall Street in the aftermath of the financial crisis of 2008, President Obama was force to adopt

A)a more populist tone.
B)more conservative fiscal policies.
C)policies that decreased taxes.
D)social welfare programs.

Question 6

In his State of the Union address before Congress and the American people in 2010, President Obama called upon Congress to support his efforts to

A)lower unemployment.
B)increase social welfare spending.
C)make college more affordable.
D)raise personal income taxes.

Question 7

Following the 2008 financial crisis, one White House official noted that struggling families, squeezed between sending their children to college and caring for elderly parents, had become the ______.

A)"greatest generation"
B)"debtor generation"
C)"struggling generation"
D)"sandwich generation"

Question 8

If Congress chooses to lower taxes and fund programs with borrowed money, which of the following may result?

A)increasing interest rates
B)decreasing employment
C)lower price levels
D)overall economic stability

Question 9

In order to make college more affordable, President Obama believed

A)Congress should increase availability of grants.
B)banks should make private loans easier to get.
C)federal work-study programs should be expanded.
D)colleges and universities should rein in their costs.

Question 10

During the time of the "student debt bubble," state legislatures were

A)mandating new performance requirements of state universities.
B)cutting back on financial support for higher education.
C)raising tuition to compensate for faculty salary increases.
D)undertaking massive state university building and expansion programs.

Question 11

The rising level of student loan debt in America is a cause of concern for economic policy as a whole because

A)students aren't always immediately prepared to pay off their loans right out of college.
B)when a significant number of students are forced to use a substantially large proportion of their income to pay for high levels of student loans, they are unable to contribute to the economy in other ways.
C)states must reallocate financial resources to offset higher tuition costs, resulting in lower revenues.
D)more students are forced to stay in college for a longer period in order to avoid having to repay their loans.

Question 12

The 2010 midterm elections resulted in the Democratic Party's loss of

A)public confidence.
B)the House of Representatives.
C)the Senate.
D)the House and Senate.

Question 13

A set of economic policy-making tools through which government tries to lower unemployment, support economic activity, and stabilize the economy through policies of taxation and spending is called

A)social policy.
B)domestic policy.
C)economic policy.
D)fiscal policy.

Question 14

In May 2015, Robert Hiltonsmith focused his college tuition research on

A)state governmental support for state universities.
B)administrators who built new facilities.
C)professors who demanded higher salaries.
D)students who called for better programs.

Question 15

Assuming no increase in the national debt, lowering taxes would most likely have the following immediate result:

A)increasing available fiscal resources for quality of life, employment, and economic development policies.
B)redistribution of remaining tax revenues to a variety of available social welfare and domestic policies.
C)reducing the amount of money available for programs designed to spur employment and economic activity.
D)maintaining employment and economic development programs at the expense of military and defense spending.

Question 16

To try to head off pending electoral change in 2010, President Obama focused much of his first State of the Union address on

A)federal economic policy.
B)fiscal spending.
C)budgetary decisions.
D)employment programs.

Question 17

A key group in the rather long list of the 99% of Americans who felt they had been left behind in the wake of the financial bailout of 2008 was

A)military veterans.
B)college students.
C)upper-class workers.
D)social welfare recipients.

Question 18

American voters want an economic climate with

A)low rates of unemployment, rising incomes, stable prices, lower taxes, and effective social welfare programs.
B)full employment, stable incomes, decreasing prices, no taxes, and an absence of social welfare programs.
C)rising unemployment, equalized incomes, stable prices, moderate taxes, and freely available social welfare programs.
D)stable employment, rising incomes, rising prices, fairly distributed taxes, and moderate availability of social welfare programs.

Question 19

Which of the following issues does the American electorate pay closest attention to?

A)American foreign policy decisions
B)American fiscal policy decisions
C)domestic policy choices and decisions
D)individual economic circumstances

Question 20

The focus of this chapter is the problem of rising ______.

A)unemployment
B)interest rates
C)student debt
D)fiscal instability

Question 21

In the 19th century, the federal government acted in the economy to support broad policy goals such as

A)the provision of market-based financial operations.
B)directly influencing the value of federal currency.
C)influencing employment through government spending.
D)the building of the Transcontinental Railroad.

Question 22

The percentage of the total labor force that is without a job can best be described as the

A)labor force.
B)unemployment rate.
C)inflation rate.
D)consumer price index.

Question 23

An economic recession is best defined as a period of decline in economic activity by a period of

A)two consecutive quarters of negative GDP growth.
B)four consecutive quarters of negative employment growth.
C)three consecutive quarters of rising consumer prices.
D)any single quarter involving combined negative GDP and employment growth with rising consumer prices.

Question 24

Inflation is best described as

A)a period of declining consumer prices (CPI).
B)a period of declining gross domestic product (GDP).
C)a period of rising unemployment.
D)a period of rising consumer prices (CPI).

Question 25

Before deciding on the details of any single economic policy, a society must first determine the appropriate role of government in

A)spending and taxation.
B)budgeting and allocating resources.
C)regulating and influencing economic activity.
D)allowing for open-market operations.

Question 26

A(n)______ indicates a private sector that is cutting back and not hiring or is laying off workers.

A)decrease in the consumer price index
B)increase in gross domestic product
C)increase in the unemployment rate
D)decrease in the inflation rate

Question 27

A decline in or stagnation of a nation's GDP indicates that the country is potentially slipping into a(n)economic

A)depression.
B)peak.
C)recession.
D)trough.

Question 28

The United States economy is best categorized as

A)laissez-faire.
B)command and control.
C)mixed.
D)socialist.

Question 29

Under Keynesianism, business cycles are driven by the aggregation of individual decisions over

A)inflation and pricing.
B)employment and investment.
C)spending and saving.
D)capital and labor.

Question 30

Under Keynesian economics, in periods of economic contraction, the government should

A)inject more money into the economy.
B)withdraw investments from banks and businesses.
C)pay off debts to avoid a budgetary deficit.
D)make direct loans and grants to citizens.

Question 31

The author of the foundational publication An Inquiry Into the Nature and Causes of the Wealth of Nations in 1776 was

A)Benjamin Franklin.
B)Adam Smith.
C)Thomas Jefferson.
D)John Locke.

Question 32

In guiding American fiscal policy, one of the main roles the federal government plays is to

A)monitor the health of the American economy.
B)directly dictate economic levels of production and price.
C)conduct direct market-based operations.
D)own and control the means of production and capital.

Question 33

In 1936, a broad theory of business cycles proposed by ______ was applied during the depths of the Great Depression.

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

Question 34

Monetarists believe that a government should

A)increase government spending in times of economic growth.
B)decrease government spending in times of economic decline.
C)focus on the rate of unemployment in order to stimulate economic activity.
D)match the growth of money to the level of growth in economic productivity.

Question 35

An economic policy in which a government dictates much of a nation's economic activity, including levels of production and prices, would best be described as a

A)laissez-faire economy.
B)command-and-control economy.
C)mixed economy.
D)socialist economy.

Question 36

Monetarists tend to focus their attention on the

A)consumer price index.
B)money supply.
C)unemployment rate.
D)gross domestic product.

Question 37

A measure of the total value of goods and services produced by a nation's economic activity is defined as

A)net national product (NNP).
B)gross domestic product (GDP).
C)gross national product (GNP).
D)net domestic product (NDP).

Question 38

The fluctuation of economic activity around a long-term trend, with periods of expansion and contraction, is best described as the

A)business cycle.
B)inflationary index.
C)gross domestic product.
D)net national product.

Question 39

An economic system in which governments intrude as little as possible in the economic transactions between citizens and businesses in both decisions about taxation and spending is known as a

A)laissez-faire economy.
B)command-and-control economy.
C)mixed economy.
D)socialist economy.

Question 40

A type of economic policy in which many economic decisions are left to individuals and businesses but also in which the federal government plays a role in using its power to shape those economic decisions is best described as a

A)laissez-faire economy.
B)command-and-control economy.
C)mixed economy.
D)socialist economy.

Question 41

Critics of supply-side theory often use the term ______ to describe it.

A)"trickle-down economics"
B)"counter-cyclical economics"
C)"investment-focused economics"
D)"limited market regulation"

Question 42

President Obama's proposed 2015 fiscal budget, submitted in March 2014, emphasized increasing spending on

A)foreign policy initiatives.
B)domestic initiatives.
C)defense initiatives.
D)tax reduction initiatives.

Question 43

Spending for programs and policies at the choice of Congress and the president is best described as

A)mandatory expenditures.
B)fiscal policy.
C)discretionary spending.
D)economic stimulus.

Question 44

When the federal government takes in less money than it spends, it runs a budget

A)deficit.
B)surplus.
C)allocation.
D)analysis.

Question 45

The Congressional Budget and Impoundment Act of 1974 requires the president's proposed budget be

A)submitted for approval by all of the members of the president's cabinet.
B)approved by a bipartisan executive budgetary committee.
C)reviewed by congressional committees on advice by the Congressional Budget Office.
D)prepared only by the Office of Management and Budget prior to submission to Congress.

Question 46

The executive branch office whose purpose is to assist the president in setting national spending priorities is the

A)Office of Management and Budget.
B)Congressional Budget Office.
C)General Accountability Office.
D)General Service Administration.

Question 47

The sum of all previously incurred annual federal deficits is called the national

A)deficit.
B)surplus.
C)debt.
D)accounting.

Question 48

Unlike Keynesians, supply-side theorists argue for a stable money supply achieved by focusing on

A)inflationary pressures.
B)unemployment rates.
C)lowering tax rates.
D)attracting consumer savers.

Question 49

Formally, the president's budget proposal carries a great deal of ______ weight.

A)constitutional
B)legislative
C)political
D)executive

Question 50

The real action on a president's proposed budget happens in the House and Senate

A)appropriations committees.
B)joint committees.
C)conference committees.
D)ad hoc committees.

Question 51

Under the Student Aid and Fiscal Responsibility Act of 2009, the law removed

A)private lenders from the practice of servicing and collecting student loan payments.
B)universities and colleges from the financial aid process altogether.
C)banks and financial institutions from granting private student loans.
D)vocational schools and colleges from the federal financial aid system.

Question 52

In response to a president's budget proposals, Congress is expected to produce a(n)

A)budgetary schedule.
B)omnibus bill.
C)counterproposal.
D)budget resolution.

Question 53

The federal government's fiscal year begins in

A)January.
B)April.
C)July.
D)October.

Question 54

If the federal government takes in more money than it spends, then it runs a budget

A)deficit.
B)surplus.
C)allocation.
D)analysis.

Question 55

Supply-side theory is often called

A)capital contraction.
B)Obamacare.
C)fiscal federalism.
D)Reaganomics.

Question 56

The ______ established the basis of modern federal budgeting processes.

A)Congressional Budgeting Control Act of 1974
B)Budget and Accounting Act of 1921
C)Federal Appropriation Act of 2010
D)Antideficiency Act of 1982

Question 57

One tool to counter the problem of student loan defaults and high student loan payments, proposed by President Obama in 2010, was to expand the policy of

A)standards-based payments.
B)income-based repayments.
C)flat-rate repayment plans.
D)standardized payment systems.

Question 58

The federal agency tasked with the responsibility to produce independent analysis of budgetary and economic issues to support the Congressional budget process is the

A)Office of Management and Budget.
B)Congressional Budget Office.
C)General Accountability Office.
D)General Service Administration.

Question 59

Which of the following brought major changes in American income tax rates?

A)the Civil War
B)World War I
C)World War II
D)the Vietnam War

Question 60

Except for a time during the Civil War under President Abraham Lincoln's administration, individual incomes

A)have always been taxed.
B)were not measured.
C)were taxed at a flat rate.
D)were not taxed until 1913.

Question 61

The rate paid to borrow money is known as the

A)interest rate.
B)unemployment rate.
C)inflation rate.
D)monetary growth rate.

Question 62

In his first State of the Union Address, President Obama made the political decision to focus much of his address on economic problems and policy proposals.

Question 63

A major criticism of the Federal Reserve system is that while governed by a nominated and confirmed board of directors, it is primarily owned by

A)private citizens.
B)the U.S. government.
C)private stockholders.
D)private banks.

Question 64

A set of economic policy tools designed to regulate the amount of money in the economy (in circulation and in deposits)is known as

A)fiscal policy.
B)economic policy.
C)social welfare policy.
D)monetary policy.

Question 65

In the wake of the 2008 financial crisis, all forms of debt except ______ saw drops.

A)auto loans
B)home equity loans
C)credit cards
D)student loans

Question 66

A policy that causes student loans to remain over a student's head for long periods of time is that educational loans

A)cannot be discharged through bankruptcy.
B)grow at high levels of interest and fines.
C)are aggressively pursued by collection agencies.
D)have unusually high default rates.

Question 67

Extremely rapid or out-of-control increases in price levels can best be described as

A)hyperactivism.
B)hyperkineticism.
C)hyperinflation.
D)hyperbolicism.

Question 68

A report by the Federal Reserve in July 2015 implicated ______ in the rise of tuition.

A)an increase in student demand
B)massive institutional building programs
C)American governmental policies
D)the availability of private loans and scholarships

Question 69

Under the current law, the amount of principal and interest forgiven in a student loan is

A)considered a tax-free gift.
B)subject to revised payment schedules.
C)partially exempt from income taxes.
D)fully taxable.

Question 70

Managing the nation's economy can be complicated by the myriad of competing variables involved.

Question 71

Fiscal policy focuses on policies of taxation and spending.

Question 72

In a speech in November 2002, former chair of the Federal Reserve Board Ben Bernanke suggested the possibility that, in an extreme economic crisis, the Federal Reserve (working in coordination with the U.S.government), could

A)print and loan enough money to finance a massive tax cut and economic stimulus.
B)force businesses to increase spending in order to jump-start the economy.
C)lower the unemployment rate through offering federal projects and job programs.
D)lower the rate of inflation by selling stocks and bonds on the open market.

Question 73

According to the vice president of the National Association of Consumer Bankruptcy Attorneys, student loans will

A)lead to a well-qualified and highly skilled job market.
B)be a drag on the economy for the foreseeable future.
C)result in as many defaulted loans, as was seen in 2008.
D)force unemployment to fall below the "moderate" 2% level.

Question 74

Which of the following is considered the central bank of the United States?

A)the Treasury Department
B)the Federal Deposit Insurance Corporation
C)the Federal Reserve System
D)the First National Bank of the United States

Question 75

Desirable economic outcomes are easily attained through systematic application of economic and fiscal principles.

Question 76

One of the Federal Reserve's stated goals is to maintain "moderate inflation" of around

A)0.5%.
B)1%.
C)2%.
D)5%.

Question 77

According to Matt Taibbi in an article for Rolling Stone titled "Ripping Off Young America," the problem with student loans was not the interest charged but the

A)means used to collect defaulted payments.
B)rising principal amounts due to tuition inflation.
C)high levels of student default.
D)services provided in exchange for college tuitions.

Question 78

When a cascading series of defaults arises, there is not enough money to pay off outstanding debt, resulting in

A)inflation.
B)unemployment.
C)deflation.
D)surplus spending.

Question 79

One of the worst instances of hyperinflation occurred during the 1920s in

A)the United States and Canada.
B)Germany, Austria, and Hungary.
C)France, Belgium, and the Netherlands.
D)England, Scotland, and Ireland.

Question 80

Students have never been considered among those who were "left behind" in the wake of the financial bailout of 2008.