Question 1

The term externalities refers to

Accepted Answer

A)  regulations imposed on a firm by government.
B)  a nation that is a trading partner of another nation.
C)  the costs of production that are incurred by society.
D)  tariffs imposed on American goods exported to other countries.
E)  None of these answers is correct.F) B) and D)
G) A) and B)

Question 2

If the Fed wanted to act to reduce unemployment,it would

Accepted Answer

A)  sell securities.
B)  raise the reserve rate.
C)  decrease the interest rate on loans to member banks.
D)  discourage businesses from expanding.
E)  encourage people to save more and spend less.F) B) and C)
G) A) and B)

Question 3

Farm subsidies account for approximately ________ of net agricultural income,making America's farmers among the most heavily subsidized in the world.

Accepted Answer

A)  10 percent
B)  one-fifth
C)  a third
D)  one-seventh
E)  two-thirdsF) C) and E)
G) A) and C)

Question 4

In John Maynard Keynes's demand-side economic theory,an economic recession can be shortened through

Accepted Answer

A)  government spending programs.
B)  the natural workings of the free-market system.
C)  raising tariffs in the global economy.
D)  a determination on the part of government not to spend any more than it receives in taxes.
E)  tax cuts for the wealthy.F) C) and E)
G) A) and B)

Question 5

Supply-side economics is based primarily on

Accepted Answer

A)  stimulation of the business (supply) component.
B)  government stimulation of consumer demands.
C)  a repudiation of trickle-down theory.
D)  increases in taxation.
E)  increases in government regulation.F) B) and D)
G) A) and D)

Question 6

Who was appointed Fed chair in 2018?

Accepted Answer

A)  Ben Bernanke
B)  Milton Friedman
C)  Alan Greenspan
D)  Janet Yellen
E)  Jerome PowellF) A) and C)
G) A) and B)

Question 7

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

Accepted Answer

A)  the 1930s.
B)  the 1860s.
C)  the 1960s.
D)  the 1980s.
E)  the 2000s.F) B) and E)
G) A) and C)

Question 8

What happened after Lehman Brothers went out of business in September of 2008?

Accepted Answer

A)  The stock market rose dramatically.
B)  The stock market rose slightly.
C)  The stock market was essentially unchanged.
D)  The stock market dropped slightly.
E)  The stock market dropped dramatically.F) A) and E)
G) D) and E)

Question 9

A major point of debate surrounding the Federal Reserve's role in economic policy is

Accepted Answer

A)  the Fed's political accountability.
B)  whether the president should be able to veto the Fed's decisions.
C)  the issue of competence.
D)  whether Congress should be able to reject the Fed's decisions.
E)  None of these answers is correct.F) C) and D)
G) A) and E)

Question 10

Monetary policy includes all of 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 rising unemployment.
E)  too much money in circulation contributes to inflation.F) A) and B)
G) A) and C)

Question 11

The Fed chair

Accepted Answer

A)  is appointed by the president,with no approval from the Senate.
B)  serves a four-year term.
C)  rarely cares about monetary policy.
D)  has absolute authority over the Fed.
E)  All of these answers are correct.F) B) and E)
G) None of the above

Question 12

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) B) and D)
G) B) and C)

Question 13

Government subsidies to small and large farmers are designed in large part to

Accepted Answer

A)  increase tax revenue levied on farm production and exports.
B)  stabilize farm income,which would otherwise fluctuate greatly due to market and weather conditions.
C)  promote farm conservation so as to preserve the productive capacity of U.S.agriculture.
D)  encourage rural development.
E)  encourage urban development.F) B) and D)
G) B) and C)

Question 14

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

Accepted Answer

Laissez-faire capitalism holds that priv...

Question 15

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

Accepted Answer

A)  raising the percentage of funds members banks are required to hold in reserve.
B)  raising the interest rate that member banks are charged when they borrow from the Federal Reserve.
C)  lowering the percentage of funds members banks are required to hold in 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) A) and B)
G) A) and C)

Question 16

The total amount of money the federal government spends each year in excess of its yearly revenues is the

Accepted Answer

A)  trade deficit.
B)  budget deficit.
C)  national debt.
D)  credit imbalance.
E)  income disparity.F) A) and B)
G) A) and E)

Question 17

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 budget deficit.
E)  All of these answers are correct.F) B) and E)
G) B) and C)

Question 18

The $787 billion stimulus bill passed by Congress in 2009

Accepted Answer

A)  illustrated classic supply-side principles.
B)  focused primarily on lowering tax rates for businesses.
C)  was passed with strong bipartisan support.
D)  had almost no Republican support.
E)  was not necessary according to most Democratic-leaning economists.F) C) and E)
G) C) and D)

Question 19

What was a major change brought about by the National Labor Relations Act of 1935?

Accepted Answer

A)  It established the national minimum wage.
B)  It broke up business monopolies in order to give workers more choice in employers.
C)  Workers were given the right to bargain collectively.
D)  It eliminated the ability of companies to bargain directly with unions.
E)  It reduced the ability of workers to go on strike indefinitely.F) A) and D)
G) C) and D)

Question 20

Which country has the highest annual emissions of carbon dioxide?

Accepted Answer

A)  United States
B)  China
C)  Japan
D)  France
E)  Great BritainF) A) and D)
G) B) and E)

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

In John Maynard Keynes's demand-side economic theory,an economic recession can be shortened through

Correct AnswerverifiedShow Answer

Farm subsidies account for approximately ________ of net agricultural income,making America's farmers among the most heavily subsidized in the world.

Correct AnswerverifiedShow Answer

The $787 billion stimulus bill passed by Congress in 2009

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Monetary policy includes all of the following assumptions EXCEPT that

Correct AnswerverifiedShow Answer

What was a major change brought about by the National Labor Relations Act of 1935?

Correct AnswerverifiedShow Answer

Supply-side economics is based primarily on

Correct AnswerverifiedShow Answer

The total amount of money the federal government spends each year in excess of its yearly revenues is the

Correct AnswerverifiedShow Answer

The Fed chair

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Which country has the highest annual emissions of carbon dioxide?

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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

What happened after Lehman Brothers went out of business in September of 2008?

Correct AnswerverifiedShow Answer

Government subsidies to small and large farmers are designed in large part to

Correct AnswerverifiedShow Answer

Who was appointed Fed chair in 2018?

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The term externalities refers to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

A major point of debate surrounding the Federal Reserve's role in economic policy is

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If the Fed wanted to act to reduce unemployment,it would

Correct AnswerverifiedShow Answer

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Laissez-faire capitalism holds that priv...
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