Question 1

If the Federal Reserve increases reserve requirements for member banking institutions, what should be the result?

Accepted Answer

When the Federal Reserve increases reserve requirements, banks must hold a larger fraction of deposits as reserves, reducing the amount they can lend out. This leads to a decrease in the money supply because there is less money being created through the lending process.

Question 2

The shared federal and state health insurance program for low-income persons is called

Accepted Answer

Medicaid is the program jointly funded by the federal and state governments to provide health insurance to low-income individuals and families.

Question 3

The federal pension program that makes a monthly payment to retired elderly workers and disabled persons is called

Accepted Answer

Social Security is the federal program that provides monthly payments to retired elderly workers, disabled individuals, and their beneficiaries.

Question 4

Regulating the amount of money in the economy and the cost of borrowing that money is the primary purpose of

Accepted Answer

Monetary policy involves managing the economy by altering the supply of money and interest rates. It is primarily used by central banks to control inflation, manage employment levels, and maintain currency stability.

Question 5

Banks will have more money to lend, and thus the money supply increases, if the Federal Reserve Board takes what action?

Accepted Answer

Decreasing reserve requirements means banks are required to hold less money in reserve and can lend out more of their deposits. This increases the amount of money circulating in the economy, effectively increasing the money supply.

Question 6

When the Federal Reserve decreases reserve requirements, what should be the result?

Accepted Answer

When the Federal Reserve decreases reserve requirements, banks are required to hold less money in reserve, which means they have more money available to lend out. This increases the money supply in the economy because it allows for more loans and, consequently, more spending and investment.

Question 7

Which entity of the federal bureaucracy,  in conjunction with state and local government,  is largely responsible for administering the major entitlement programs discussed in this chapter?

Accepted Answer

The Department of Health and Human Services is responsible for administering major entitlement programs like Medicare and Medicaid, often in conjunction with state and local governments.

Question 8

Now retired, Louisa relies upon a federal program to provide her with health insurance benefits. As a worker, she contributed to this program by law out of her earnings. Louisa's health insurance is provided by

Accepted Answer

Medicare is the federal program that provides health insurance to individuals who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease. Workers contribute to this program through payroll taxes during their employment years, making it the correct choice for Louisa's situation.

Question 9

A local tire manufacturing firm fails to properly maintain its system for reducing harmful, toxic gas emissions that are produced as a result of its processes. The federal agency responsible for administering, enforcing, and possibly assessing the company a fine for violating standards is the

Accepted Answer

The Environmental Protection Agency (EPA) is the federal agency responsible for administering and enforcing environmental laws in the United States, including those related to the reduction of harmful and toxic gas emissions from industrial processes.

Question 10

When two or more nations engage in an exchange of goods, this is known as

Accepted Answer

International trade refers to the exchange of goods and services between two or more countries.

Question 11

If the United States' economic indicators measure successive quarters of lower economic output, this is known as a

Accepted Answer

A recession is typically defined as a decline in GDP for two consecutive quarters, indicating a period of reduced economic activity across the economy.

Question 12

What law first expanded the federal government's ability to monitor and protect the environment against pollution?

Accepted Answer

The Clean Air Act, first enacted in 1963 and significantly amended in 1970 and 1990, was the first major environmental law in the United States that expanded the federal government's authority to monitor and protect the environment against pollution, specifically air pollution.

Question 13

Contributing factors of the recession of 2007-2009 included all of the following EXCEPT

Accepted Answer

The recession of 2007-2009, also known as the Great Recession, was primarily caused by factors related to the housing market and financial sector, such as widespread foreclosures, inflated housing prices, irresponsible lending by banks, and excessive borrowing by consumers. An unstable political process was not a direct contributing factor to the recession.

Question 14

The U.S. takes action to prevent an influx of new vehicles manufactured in China by Chinese corporations from being imported and entering the marketplace, which will reduce competition for U.S. auto manufacturers. This policy purposely raises import barriers to prevent unfair trade practices and is termed

Accepted Answer

Protectionism refers to government actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition. In this scenario, raising import barriers to reduce competition for U.S. auto manufacturers is a form of protectionism.

Question 15

Social Security, Medicare, and Medicaid are examples of

Accepted Answer

Social Security, Medicare, and Medicaid are examples of entitlement programs because they are designed to provide benefits to all individuals who meet certain eligibility criteria, regardless of income or need.

Question 16

Who controls monetary policy in the United States?

Accepted Answer

The Federal Reserve Board, often referred to simply as the Federal Reserve or the Fed, is responsible for controlling monetary policy in the United States. This includes influencing interest rates, controlling inflation, and regulating the money supply to ensure economic stability.

Question 17

For most, what is the first step in becoming a naturalized citizen of the United States?

Accepted Answer

The first step in becoming a naturalized citizen of the United States for most people is to apply for a green card (Permanent Resident Card), which establishes lawful permanent residency in the U.S. This is a prerequisite before one can apply for naturalization.

Question 18

The name of the recent major health care law mandating that individuals have health insurance is

Accepted Answer

The Affordable Care Act, often referred to as Obamacare, is the major health care law that mandates individuals to have health insurance. It was signed into law in 2010 to increase health insurance quality and affordability, lower the uninsured rate by expanding insurance coverage, and reduce the costs of healthcare.

Question 19

Becoming a fully naturalized citizen requires all of the following EXCEPT

Accepted Answer

Renouncing any past political affiliation is not a requirement for becoming a fully naturalized citizen of the United States. The other options (A, B, D, E) are indeed requirements for naturalization.

Question 20

Member banking institutions pay the Federal Reserve an interest rate on loans, a concept termed the

Accepted Answer

The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Quiz 16: Economic Domestic and Foreign Policy

If the Federal Reserve increases reserve requirements for member banking institutions, what should be the result?

The shared federal and state health insurance program for low-income persons is called

The federal pension program that makes a monthly payment to retired elderly workers and disabled persons is called