Question 1

When the Fed was created in 1913,

Accepted Answer

A)  it had no role in the management of the nation's economy.
B)  it was restricted to providing emergency loans to financial institutions.
C)  it adhered to a strictly supply-side policy focus.
D)  its primary economic management tool was to reduce inflation by restricting the money supply.
E)  it was far more likely to increase the money supply by lowering interest rates than to restrict it by raising them.F) C) and D)
G) B) and E)

Question 2

Which president's use of government policy as economic stimulus ushered in the modern era of U.S.government fiscal policy?

Accepted Answer

A)  Thomas Jefferson
B)  Franklin Roosevelt
C)  Lyndon Johnson
D)  Woodrow Wilson
E)  William ClintonF) A) and C)
G) A) and E)

Question 3

The Federal Reserve controls the money supply through all of the following actions EXCEPT

Accepted Answer

A)  raising the cash reserve that member banks are required to deposit with the Federal Reserve.
B)  raising the interest rate that member banks are charged when they borrow from the Federal Reserve.
C)  lowering the cash reserve that member banks are required to deposit with the Federal Reserve.
D)  lowering the interest rate that member banks are charged when they borrow from the Federal Reserve.
E)  lowering the tax rate on individuals.F) B) and E)
G) B) and D)

Question 4

Which of the following is true regarding the Kyoto agreement and greenhouse gas emissions?

Accepted Answer

A)  The United States is the largest single producer of greenhouse emissions in the world,on a per-capita basis.
B)  President George W.Bush rejected the agreement.
C)  It was a multinational effort to reduce carbon emissions.
D)  The burden of addressing the global warming problem will fall unevenly on nations.
E)  All these answers are correct.F) C) and E)
G) A) and D)

Question 5

Describe Adam Smith's laissez-faire model of economics.

Accepted Answer

Laissez-faire capitalism holds that priv...

Question 6

Which is true regarding the nation's environmental policy?

Accepted Answer

A)  The first major steps by the national government to clean up the environment began in the early 1900s.
B)  A majority of the public is sympathetic to environmentalism.
C)  The modern environmental movement gained impetus with the publication of Armageddon in 1949.
D)  In the 1960s,the government began a policy of land conservation through the creation of national parks.
E)  A majority of the public is not sympathetic to environmentalism.F) B) and C)
G) A) and B)

Question 7

Monetary policy includes all the following assumptions EXCEPT that

Accepted Answer

A)  the money supply is the key to sustaining a healthy economy.
B)  too little money in circulation contributes to inflation.
C)  too little money in circulation contributes to a slowdown in consumer buying.
D)  too little money in circulation contributes to a slowdown in production.
E)  too much money in circulation contributes to inflation.F) None of the above
G) A) and B)

Question 8

The era of "new social regulation," which addressed issues such as the environment and worker safety,differed from the previous two eras of regulatory reform in that

Accepted Answer

A)  the Republican Party took the lead in placing additional regulations on business.
B)  the aim was to regulate activities of firms of many types,not just those in a particular industry.
C)  the regulatory agencies were established in a way that prevented the president from having a role in their operations.
D)  the guiding principle was self-regulation-business was given wide leeway in deciding how it would comply with the new requirement.
E)  the guiding principle was overregulation-business would be allowed almost no leeway in deciding how it would comply with new regulations.F) C) and D)
G) A) and B)

Question 9

Advocates of deregulation are primarily concerned with

Accepted Answer

A)  efficiency.
B)  equity.
C)  externalities.
D)  public safety.
E)  political expediency.F) None of the above
G) A) and E)

Question 10

The creation of the Food and Drug Administration and the passage of the Securities and Exchange Act were intended to

Accepted Answer

A)  promote equity in the economy.
B)  eliminate the problem of externalities in the economy.
C)  destroy the legal foundation of the business trust.
D)  promote efficiency in the economy.
E)  None of these answers is correct.F) A) and D)
G) B) and C)

Question 11

Which of the following statements best describes the relationship today between government and the economy in the United States?

Accepted Answer

A)  The economy is largely self-regulating.
B)  The government subsidizes economic interests but otherwise leaves them to operate as they please.
C)  The government is the driving force in the U.S.economy; business has a secondary role.
D)  The government has an important role in regulating and maintaining the U.S.economy.
E)  The government owns most of the means of production in the United States.F) A) and D)
G) All of the above

Question 12

The federal government has assumed a permanent,strong role in the economy,contributing to its stability and efficiency,

Accepted Answer

A)  since the 1930s.
B)  since the 1860s.
C)  since the 1960s.
D)  since the 1980s.
E)  None of these is correct; federal spending has reached high levels only sporadically.F) A) and B)
G) C) and D)

Question 13

,Adam Smith made all of the following arguments for laissez-faire capitalism,EXCEPT which of the following?

Accepted Answer

A)  The desire for profit is the invisible hand that guides a capitalist system.
B)  The government should not be allowed any role whatsoever in the economy.
C)  Private firms should be left alone to make their production and distribution decisions.
D)  Firms will try to use as few resources as possible in order to keep their prices low.
E)  Certain areas of the economy were better run by government agencies.F) A) and C)
G) B) and E)

Question 14

Supply-side economics,as implemented by President George W.Bush's administration,involved

Accepted Answer

A)  the supply component of the supply-demand equation.
B)  stressing the importance of tax cuts for businesses.
C)  stressing the importance of tax cuts for the wealthy.
D)  an increase in the size of the national debt.
E)  All these answers are correct.F) B) and D)
G) None of the above

Question 15

About what percentage of the annual federal budget is accounted for by the interest paid on the national debt?

Accepted Answer

A)  50%
B)  5%
C)  25%
D)  15%
E)  2%F) A) and B)
G) A) and C)

Question 16

A ruling by the Food and Drug Administration that a drug is dangerous to use and therefore cannot be marketed is an example of regulation for the purpose of

Accepted Answer

A)  supply-side safety.
B)  demand-side safety.
C)  equity.
D)  efficiency.
E)  profit.F) A) and B)
G) A) and C)

Question 17

Keynesian economics emphasizes ________ as a means of curtailing economic downturns.

Accepted Answer

A)  reduced taxes
B)  increased government spending
C)  decreased regulation
D)  decreased inflation
E)  increased taxesF) A) and E)
G) A) and B)

Question 18

Economic efficiency requires

Accepted Answer

A)  that the free market not be regulated by government.
B)  that the output of goods and services is the highest possible given the amount of input used to produce them.
C)  the economy to be organized around large firms.
D)  economic transactions to be fair to each party.
E)  economic transactions to be equal to each party.F) A) and D)
G) B) and E)

Question 19

Earth Day was the brainchild of Senator

Accepted Answer

A)  Ted Kennedy.
B)  Robert Byrd.
C)  Mike Mansfield.
D)  Ted Stevens.
E)  Gaylord Nelson.F) B) and C)
G) B) and E)

Question 20

The Superfund program is designed to

Accepted Answer

A)  bail out financial institutions that are considered too large to collapse.
B)  provide domestic farmers with subsidies in order to remain competitive with international farming.
C)  provide funds for cleaning up badly contaminated and polluted sites.
D)  provide the president with emergency funds to deal with major natural disasters.
E)  None of these answers is correct.F) B) and D)
G) C) and D)

Exam 11: Economic and Environmental Policy: Contributing to Prosperity

When the Fed was created in 1913,

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The era of "new social regulation," which addressed issues such as the environment and worker safety,differed from the previous two eras of regulatory reform in that

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Economic efficiency requires

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Which is true regarding the nation's environmental policy?

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The creation of the Food and Drug Administration and the passage of the Securities and Exchange Act were intended to

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Which of the following is true regarding the Kyoto agreement and greenhouse gas emissions?

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,Adam Smith made all of the following arguments for laissez-faire capitalism,EXCEPT which of the following?

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A ruling by the Food and Drug Administration that a drug is dangerous to use and therefore cannot be marketed is an example of regulation for the purpose of

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Describe Adam Smith's laissez-faire model of economics.

Correct AnswerverifiedLaissez-faire capitalism holds that priv...View AnswerShow Answer

The Federal Reserve controls the money supply through all of the following actions EXCEPT

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The Superfund program is designed to

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About what percentage of the annual federal budget is accounted for by the interest paid on the national debt?

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Which of the following statements best describes the relationship today between government and the economy in the United States?

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Advocates of deregulation are primarily concerned with

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Monetary policy includes all the following assumptions EXCEPT that

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Supply-side economics,as implemented by President George W.Bush's administration,involved

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The federal government has assumed a permanent,strong role in the economy,contributing to its stability and efficiency,

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Earth Day was the brainchild of Senator

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Keynesian economics emphasizes ________ as a means of curtailing economic downturns.

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Which president's use of government policy as economic stimulus ushered in the modern era of U.S.government fiscal policy?

Correct AnswerverifiedShow Answer

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Laissez-faire capitalism holds that priv...
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