Question 1

The institution established by Congress in the early twentieth century to implement monetary policy is the:

Accepted Answer

The Federal Reserve System, established in 1913, is the central banking system of the United States, created to implement monetary policy.

Question 2

Although sometimes a seeming adversary of business and industry when acting in a regulatory role, and often disliked by the private sector for its taxes and regulations, government is nonetheless essential to the functioning of a market economy because:

Accepted Answer

Government provides the necessary legal framework, stability, and enforcement of contracts that allow market economies to function effectively.

Question 3

Although the networks and infrastructure that keep the Internet humming are often products of private industry, its origins lie in networks developed by the American federal government, largely in connection with national defense, as well as research.Today, of course, most of the country's fastest-growing businesses are Internet companies. From what you have read, how unusual was this digital development in relation to how provision of public goods has supported business and technological development over time?

Accepted Answer

The federal government has historically played a significant role in supporting business and technological development through the provision of public goods and services, such as infrastructure and research, which has often led to the growth of new markets and industries.

Question 4

Although Alexander Hamilton developed policies to promote industry at the beginning of the American republic's history, it was not until _______________, that the federal government began playing a central role in promoting economic growth.

Accepted Answer

The federal government began playing a central role in promoting economic growth during the twentieth century, particularly with the New Deal programs created in response to the Great Depression.

Question 5

Congressional attempts to plan for the economic effects of taxing and spending are known as:

Accepted Answer

Fiscal policy planning involves government strategies for taxation and spending to influence the economy.

Question 6

Beginning in 1971, the federal government tried to _______________ by implementing strict controls over what wages people could be paid for their work, what rent their real estate could bring, and what interest they could get on their money.

Accepted Answer

The federal government implemented wage and price controls in 1971 as part of an effort to combat inflation, which was a significant economic issue at the time.

Question 7

A public policy is a law, rule, statute, regulation, or order that:

Accepted Answer

Public policy is designed to express the government's goals and objectives, addressing issues that affect the public.

Question 8

Who controls the Federal Reserve System?

Accepted Answer

The Federal Reserve System is controlled by its chair and board, who are appointed by the President and confirmed by the Senate. However, once appointed, they make decisions independently of the executive branch.

Question 9

The federal government put millions of people back to work during the Great Depression by:

Accepted Answer

The federal government created agencies like the Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC) to employ millions in public works projects during the Great Depression.

Question 10

The Federal Reserve has the power to change the interest rate at which banks lend money to each other through a process called:

Accepted Answer

The Federal Reserve influences the federal funds rate, which is the interest rate at which banks lend to each other overnight, through open market operations and other monetary policy tools.

Question 11

The federal Social Security Act of 1935 created _________________, jointly administered by the federal and state governments, designed to help workers whose jobs have been terminated through no fault of their own.It does so by providing payments to these workers for a short time.

Accepted Answer

The federal Social Security Act of 1935 established the unemployment insurance program, which provides temporary financial assistance to workers who have lost their jobs through no fault of their own.

Question 12

The federal government measures the performance of the American economy, excluding income from foreign investments, at any given time through its measure of:

Accepted Answer

GDP measures the market value of all goods and services produced in the United States, excluding income from foreign investments.

Question 13

A voluntary agreement between two or more private persons that facilitates the exchange of property or services, and which is given weight when it can be legally enforced, is called a:

Accepted Answer

A contract is a legally enforceable agreement between two or more parties that facilitates the exchange of property or services.

Question 14

In 2010, Congress passed tougher financial regulations in response to harsh criticism of the Securities and Exchange Commission (SEC) for what analysts charged was ____________________ prior to the recessionary years of 2008-2009.

Accepted Answer

The criticism of the SEC was for its weak oversight of the financial sector, which was seen as a contributing factor to the financial crisis of 2008-2009.

Question 15

Market standards that are often provided by governments, such as weights and measures, are important to the functioning of a market economy because:

Accepted Answer

Market standards like weights and measures help ensure that transactions are fair and transparent, allowing people to understand and agree on the terms of trade.

Question 16

The federal government's annual taxing and spending decisions are important to the American economy because:

Accepted Answer

The federal government's taxing and spending decisions, known as fiscal policy, directly influence economic activity by affecting aggregate demand, employment, and inflation, thereby impacting the overall health of the economy.

Question 17

The ____________________, created after the stock market crash of 1929, requires companies to disclose information about any stocks and bonds they are selling, as well as inform buyers of investment risks and protect investors against fraud.

Accepted Answer

The Securities and Exchange Commission (SEC) was created after the stock market crash of 1929 to regulate the securities markets and protect investors by requiring transparency and disclosure of financial information.

Question 18

Monetary policy, of the sort typically handled by a country's central bank or banking system, involves:

Accepted Answer

Monetary policy involves managing the economy by controlling the supply of money and credit, typically through interest rates and other financial tools, which is the responsibility of a central bank.

Question 19

The Federal Reserve has the power to directly increase or restrict the amount of money available to consumers to spend or invest through:

Accepted Answer

The answer of The Federal Reserve has the power to...

Question 20

Why might government's defining, recognizing, and protecting property of every sort, from real estate and land to intellectual property, be so essential to the functioning of a market economy?

Accepted Answer

Legal recognition and enforcement of property rights are essential for a market economy because they provide the necessary framework for transactions, investments, and economic activities to occur with confidence and security.

Quiz 13: Introduction to Public Policy