Question 1

In order for mortgage-backed securities to provide a return to their customers,

Accepted Answer

Mortgage-backed securities (MBS) are investments that are secured by mortgages, which means they pay out returns based on the mortgage payments received from homeowners. The value of these securities is generally more favorable when home prices go up. Rising home prices can lead to lower default rates on mortgages, as homeowners have more equity in their homes and are less likely to default. This makes the securities more secure and potentially more profitable, providing a better return to investors.

Question 2

Because banks could not produce enough loans to supply the mortgage-backed securities market, they began to

Accepted Answer

Banks turned to subprime lending and other risky practices to try to meet the demand for mortgage-backed securities. This led to a housing market bubble and eventual collapse in 2008.

Question 3

A problem with mortgage-backed securities (MBS)was

Accepted Answer

The key problem with mortgage-backed securities was that they disconnected the relationship between the borrower and the holder of the loan. The borrower stopped being accountable to the holder of the loan, which created a moral hazard problem where borrowers were more likely to default on their loans since they no longer had a relationship with the lender. This was a major contributor to the subprime mortgage crisis of 2008. While the other choices may have played a role in the MBS problem, they are not as central to the issue as the disconnection of the borrower-lender relationship.

Question 4

Which of the following describes the paradox of factions?

Accepted Answer

The paradox of factions refers to the fact that while factions, or groups with shared interests, are potentially dangerous to the stability of a government, the Constitution guarantees the right to form and express them as a fundamental aspect of democracy. Thus, while the Constitution seeks to prevent any single faction from dominating the government or infringing upon the rights of others, it also recognizes the inevitability of their formation and the need for their protection. None of the other options accurately describe the paradox of factions.

Question 5

Associations of individuals that come together to change things or to keep things from changing by calling attention to a set of perceived injustices or wrongs in order to get policy makers to act and/or to educate the people are best described as

Accepted Answer

Social movements are typically groups of individuals who come together to address a perceived injustice or wrong in society, often seeking to bring about change through collective action and public awareness-raising. Citizen counsels and interest groups can also work towards policy change or education, but social movements are uniquely characterized by their grassroots nature and tendency towards mobilization and protest. Political action committees are typically formed to support specific candidates or parties in elections, and although they may engage in advocacy and education, they are not typically associated with social movements.

Question 6

In the American political system, elected leaders are tasked with

Accepted Answer

Elected leaders are expected to represent the interests and needs of their constituents and speak on their behalf in political decision-making. While all options may be involved in the responsibilities of elected leaders, B best captures the essential task of representing and advocating for the public.

Question 7

The roots of the financial crisis in the first decade of the 21st century were in the ______ market.

Accepted Answer

The financial crisis of the first decade of the 21st century can be traced back to the housing market, where subprime mortgages were given to unqualified borrowers who were unable to repay the loans. The widespread defaults on these mortgages led to a housing market crash, which in turn led to a larger financial crisis.

Question 8

Members of interest groups and social movements often resort to ______ to achieve their goals.

Accepted Answer

Interest groups and social movements use different tactics to achieve their goals such as lobbying, protest marches, boycotts, litigation, and grassroots organizing.

Question 9

Madison's solution to the problem of factions was to

Accepted Answer

Madison believed that a variety of competing factions would prevent any single faction from dominating, thus protecting the rights and interests of minority groups. This concept is outlined in Federalist No. 10, where he argues that a large republic can better guard against the dangers of factionalism by diluting their effects.

Question 10

James Madison realized that to eliminate factions, a republic must also

Accepted Answer

The answer of James Madison realized that to eliminate factions,...

Question 11

In what year did the American housing market crash?

Accepted Answer

The American housing market crashed in 2008, resulting in the Great Recession. The crash was caused by a combination of factors, including subprime lending, overbuilding, and financial industry deregulation.

Question 12

Which of the following, because of its efforts to right a perceived social wrong, would be considered an interest group that spawned a social movement?

Accepted Answer

The National Association for the Advancement of Colored People (NAACP) is an interest group that has also spawned a social movement, as it has been involved in the struggle for civil rights for African Americans. Its efforts have gone beyond mere lobbying and have involved grassroots activism, such as protests, boycotts, and legal challenges to discriminatory practices. The other answer choices represent interest groups that have specific economic or professional interests, but do not necessarily have a broader social agenda or mobilize their members to engage in mass action beyond the political arena.

Question 13

James Madison addressed the problem of factions in

Accepted Answer

James Madison addresses the problem of factions in Federalist 10. Specifically, he discusses how the large and diverse population of the United States can mitigate the negative effects of factions through representative government and a separation of powers.

Question 14

Voluntary associations of people that come together with an agreed-upon set of political and policy objectives and who attempt to pull the levers of political power in the service of these defined goals are known as:

Accepted Answer

Interest groups are organizations that exist to represent the interests of specific groups of people or industries, and attempt to influence government policy and decision-making. They are voluntary associations with political and policy objectives, and often use tactics such as lobbying and campaign contributions to achieve their goals. Citizen counsels, political action committees, and social movements are all types of groups that may have political objectives, but they do not necessarily focus on the activities of government or attempt to influence policy outcomes in the same way as interest groups.

Question 15

voluntary associations share common traits in that they

Accepted Answer

Voluntary associations are protected under the First Amendment, which guarantees the right to freedom of assembly, allowing people to organize and associate freely.

Question 16

Alexis de Tocqueville was struck by Americans' passion for

Accepted Answer

Alexis de Tocqueville observed that Americans were particularly drawn to joining groups, such as trade unions, religious organizations, and clubs. He noted that these voluntary associations played a significant role in American society and helped to foster a sense of community and belonging among individuals. While Americans also valued democratic and republican principles, and had a strong individualistic streak, de Tocqueville's work emphasized the importance of social bonds and civic engagement in American life.

Question 17

Mortgage-backed securities are described as the financial equivalent of

Accepted Answer

The answer of Mortgage-backed securities are described as the financial...

Question 18

What policy decision did banks want the Federal Reserve and the Treasury Department to make?

Accepted Answer

Banks wanted the Federal Reserve and the Treasury Department to make a large national bailout to stabilize the economy during crises such as the Great Recession. This would involve providing financial assistance to struggling institutions, injecting liquidity into the market, or implementing stimulus measures. Lowering or raising interest rates and implementing tighter money policies are tools that can be used by the Federal Reserve to control inflation and stabilize the economy, but these were not the specific policy decision that banks were requesting during the recession.

Question 19

The danger in interest groups and social movements is always one of ______.

Accepted Answer

Interest groups and social movements can become too focused on achieving their goals and can potentially infringe on the rights of others in the process. This can lead to factionalism and even violence. It is important for these groups to work within the framework of laws and respect the rights of others. The other options may also be risks, but the danger of factions is the most immediate and relevant to the question.

Question 20

Groups and communities that join with each other in pursuit of collective interests and common goals are known as

Accepted Answer

Voluntary associations are groups of individuals who come together voluntarily to pursue common interests and goals. These groups are typically independent of government and often involve members who share similar values or beliefs. Examples of voluntary associations include activist groups, professional associations, and social clubs.

Quiz 11: Interest Groups and Social Movements