AP US GOVERNMENT AND POLITICS BYRNE 1 Which of the following is not an example of the federal government providing a foundation for the free market p rotecting property rights providing for secure and transparent capital markets ID: 555475
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Slide1
Ch. 15 “Economic Policy” reading quiz
AP US GOVERNMENT AND POLITICS: BYRNESlide2
1. Which of the following is
not
an example of the federal government providing a foundation for the free market?
p
rotecting property rights
providing for secure and transparent capital markets
requiring banks to maintain a certain amount of money on hand
subsidizing transportation systemsSlide3
2. What is the definition for “stagflation”?
high inflation and low unemployment
high inflation and high unemployment
low inflation and low unemployment
low inflation and high unemploymentSlide4
3. what is the current account?
the difference between government revenues and government spending
the difference between the net value of exports and the net value of imports
the difference between the money earned via foreign investments and the money foreigners earn on American investments
the difference between all national receipts and all national paymentsSlide5
4. among other responsibilities, the office of management and budget is primarily responsible for
setting trade policy and establishing tariffs.
giving the president objective data on the state of the economy.
elevating economic policy to the level of national security and foreign policy.
creating the president’s budget.Slide6
5. the laffer
curve depicts the notion that
government can raise revenue by cutting taxes.
government can raise revenue by raising taxes.
state governments are increasingly supported by the federal government.
the trade deficit negatively influences the current account.Slide7
6. how much of the current budget is allocated to mandatory spending?
20 percent
35 percent
50 percent
65 percentSlide8
7. inflation generally
savers and
debtors.
rewards; rewards
rewards; punishes
punishes; rewards
punishes; punishesSlide9
8. Keynesian economic theory argues that the government
can raise the total revenue by cutting taxes.
should not consider the economic conditions when setting policy.
should use economic policy to maintain economic stability.
should let economists set the country’s budget.Slide10
9. what does the theory of regulatory capture argue?
Congress can create regulations to serve the public interest, but regulatory agencies become controlled by the industries they are supposed to be regulating.
Congress doesn’t intend to serve the public interest when it establishes regulatory policies but instead attempts to redistribute income toward certain industries for support.
Regulations are ineffective, and the only way for the government to regulate certain industries is for Congress to nationalize them.
Congress regulates the economy when there are market failures in order to serve the public interest.Slide11
10. what is the requirement that banks have a certain amount of money on hand to cover withdrawals called?
The reserve requirement.
The withdrawal requirement.
The balance requirement.
The security requirement.Slide12
11. regressive taxes are those that cause the
poor to disproportionately bear the tax burden.
tax burden to be shared to be shared across income levels.
wealthy to disproportionately bear the tax burden.Slide13
12. Which federal organization is primarily in charge of setting monetary policy?
Office of Management and Budget
Senate Finance Committee
Treasury Department
Federal Reserve BoardSlide14
13. Which of the following is one of the treasury department’s jobs?
produce currency
set the reserve requirement for banks
undertake quantitative easing (QE) programs
regulate short-term interest ratesSlide15
14. the Federal reserve system was established with the goal of
fueling economic growth.
preventing inflation.
bringing stability to the banking system.
increasing the efficiency of lending practices.Slide16
15. which of the following establishments has the least influence on day-to-day economic activity?
the Supreme Court
the president
Congress
the bureaucracySlide17
16. in recent years, congress has relied on “continuing resolutions” to temporarily keep government programs running because
the president and Congress do not agree on budget priorities.
Democrats and Republicans are so polarized on economic policy they cannot agree.
the House and Senate versions of spending bills often cannot be reconciled.
the PAYGO rule requires waiting to pass a new budget until tax revenues are collected.Slide18
17. in general, which of the following best describes the goals of the fed and the treasury department?
The Fed and the Treasury Department both prefer a low interest rate for loans.
The Fed and the Treasury Department both prefer a high interest rate for loans.
The Fed prefers a high interest rate for loans and the Treasury Department prefers a low interest rate for loans.
The Fed prefers a low interest rate for loans and the Treasury Department prefers a high interest rate for loans.Slide19
18. The monetarist theory of economics says that the
is the primary influence of economic activity and inflation.
amount of money in circulation
level of unemployment
budget deficit
level of government
spendingSlide20
19. What is budget reconciliation?
combining the president’s and Congress’s budgets
combining budgetary estimates from the OMB and the CBO
combining all budgetary changes from committees into one spending
bill
revising spending goals based on economic conditionsSlide21
20. The primary way the Supreme Court helps economic policy is by
maintaining an independent, honest legal system.
prosecuting tax
fraud.
enforcing federal finance laws.
setting the Federal Reserve Board’s yearly budget.Slide22
21.
occurs when a single firm controls the entire market for a product.
A monopoly
An externality
A regulatory capture
A principle-agent problemSlide23
22. when did full employment become an explicit goal of economic policy?
during Reconstruction
after World War I
during the Great Depression
after World War IISlide24
23. what is the federal funds rate?
the rate the Fed charges member banks for short-term loans
the rate the Fed charges member banks for long-term loans
the rate that banks charge each other for short-term loans
the rate that banks charge each other for long-term loansSlide25
24. which of the following is an example of a negative externality?
increased education leading to broader social productivity
a company failing to maintain proper grain storage protocol, lead to a fire in its building
the family next door using aerosol products that contain ozone-depleting CFCs
beekeeper’s bees pollinating surrounding crops.Slide26
25. Which of the following is a source of political independence for the fed?
The
Fed’s decisions
are not subject to congressional or presidential approval.
The Fed’s leadership is elected within the committee.
Each of the Fed’s governors serve four year terms, matched to presidential elections.
The Fed’s decisions are implemented by Congress.Slide27
26. If the United States is running a trade deficit, it wants the price of the dollar to
and for U.S. exports to become
expensive.
rise; more
rise; less
fall; more
fall; lessSlide28
27. The most common market failures that lead to social regulation are
alternative externalities.
negative externalities.
non-excludability.
incomplete marketsSlide29
28. Congress’s budgetary power
from the period of the 1920s through the 1970s.
grew
shrank
stayed the sameSlide30
29. over time, congress has
the amount of economic regulation and
the amount of social regulation.
increased; increased
increased; decreased
decreased; increased
decreased; decreasedSlide31
30. the trade deficit has been exacerbated by
a weak dollar and a weak demand for foreign goods.
a weak dollar; strong demand for foreign goods.
a strong dollar; weak demand for foreign goods.
a strong dollar; strong demand for foreign goods.Slide32Slide33
C p. 607
B p. 607
D p. 607
D p. 613
A p. 625
C p. 625
C p. 607
C p. 625
A p. 625
A p. 625
A p. 625
D p. 625
A p. 613
C p. 613
A p. 613
B p. 613
C p. 613
A p. 625
C p. 613
A p. 613
A p. 625
D p. 607
D p. 625
C p. 625
B
p. 613
D p. 625
B p. 625
A p. 613
C p. 625
B p. 607