Question 1

In The Wealth of Nations (1776) ,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 E)
G) A) and D) B

Question 2

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 D)

Question 3

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) All of the above
G) None of the above

Question 4

What has been the preferred strategy of U.S.lawmakers for combating the problem of global warming?

Accepted Answer

A)   reducing regulation on businesses to allow more private-sector solutions to develop creatively
B)   raising interest rates to slow down the economy
C)   business-tradable carbon tax credits
D)   reduction of carbon emissions
E)   alternative energy sources and energy conservationF) A) and C)
G) A) and D)

Question 5

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) D) and E)
G) All of the above

Question 6

Define the term monetary policy,and describe two ways the Fed implements monetary policy.

Accepted Answer

Monetary policy is based on manipulation...

Question 7

Define the term fiscal policy and explain how fiscal policy can be used in response to economic conditions.

Accepted Answer

The government's efforts to maintain a stable economy are made mainly through its taxing and spending decisions,which together are referred to as its fiscal policy.The main school of thought associated with fiscal policy is demand-side economics,which originated in the theories of economist John Maynard Keynes.In different forms,demand-side economics has influenced government policy since the New Deal programs of Franklin D.Roosevelt in the 1930s.When there is an economic downturn,government can increase its spending or cut individual taxes as a means of stimulating consumer (demand-side)spending.When the economy is inflationary,the opposite actions can be taken as a way of dampening consumer demand.Fiscal policy can also take a supply-side form,as it did in part during the Reagan years.Supply-side emphasizes business production and investment.The economy can be stimulated through a reduction in taxes on firms and high-income individuals.

Question 8

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) B) and D)
G) A) and B)

Question 9

The highest rate of inflation (13 percent) since World War II occurred in ________.

Accepted Answer

A)   1955
B)   1963
C)   1979
D)   1991
E)   2002F) C) and E)
G) A) and B)

Question 10

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) None of the above
G) A) and E)

Question 11

Fiscal policy is a mechanism the government employs to influence the economy.Fiscal policy is based on

Accepted Answer

A)   the idea that a balanced budget is the key to a healthy economy.
B)   the money supply.
C)   the government's taxing and spending decisions.
D)   the importance of maintaining a 12-month (fiscal year)  economic cycle.
E)   the projections of the Federal Reserve Board.F) A) and D)
G) A) and C)

Question 12

Explain the difference between economic efficiency and economic equity as principles that justify government regulation of the economy.

Accepted Answer

An economy is a system of production and...

Question 13

Over the past forty years,the burden of federal taxation has

Accepted Answer

A)   shifted from big business to small business.
B)   shifted from individuals to corporations.
C)   shifted from corporations to individuals.
D)   evened out between individuals and corporations.
E)   None of these answers is correct.F) All of the above
G) C) and E)

Question 14

Regarding the Kyoto agreement and greenhouse gas emissions,which of the following is true?

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) B) and C)
G) B) and E)

Question 15

Farm subsidies have traditionally had strong support in Congress,particularly from

Accepted Answer

A)   representatives whose districts are rural.
B)   rural-state senators and representatives.
C)   senators whose states are rural.
D)   the Speaker of the House and Senate president pro tempore.
E)   Democratic senators and representatives.F) All of the above
G) C) and E) B

Question 16

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)   a lowering of 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) None of the above
G) D) and E)

Question 17

A fiscal policy solution to inflation would be to

Accepted Answer

A)   increase government spending.
B)   lower tariffs and other barriers to trade.
C)   increase the tax rate.
D)   raise the discount rate.
E)   decrease the tax rate.F) A) and E)
G) A) and D)

Question 18

Advocates of deregulation are primarily concerned with

Accepted Answer

A)   efficiency.
B)   equity.
C)   externalities.
D)   public safety.
E)   political expediency.F) C) and D)
G) All of the above

Question 19

Judged in the context of the full range of public policies,the government in the United States has been

Accepted Answer

A)   equally hostile to the interests of business and labor.
B)   equally supportive of the interests of business and labor.
C)   substantially more supportive of business than labor.
D)   substantially more supportive of labor than business.
E)   substantially more supportive of left-wing radicals than conservatives.F) B) and E)
G) B) and D)

Question 20

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) D) and E)
G) C) and D)

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

In The Wealth of Nations (1776) ,Adam Smith made all of the following arguments for laissez-faire capitalism,EXCEPT which of the following?

Correct Answer
verified
B

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

Correct Answer
verified

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

Correct Answer
verified

What has been the preferred strategy of U.S.lawmakers for combating the problem of global warming?

Correct Answer
verified

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

Correct Answer
verified

Define the term monetary policy,and describe two ways the Fed implements monetary policy.

Correct Answer
verified
Monetary policy is based on manipulation...
View Answer

Define the term fiscal policy and explain how fiscal policy can be used in response to economic conditions.

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

Correct Answer
verified

The highest rate of inflation (13 percent) since World War II occurred in ________.

Correct Answer
verified

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

Correct Answer
verified

Fiscal policy is a mechanism the government employs to influence the economy.Fiscal policy is based on

Correct Answer
verified

Explain the difference between economic efficiency and economic equity as principles that justify government regulation of the economy.

Correct Answer
verified
An economy is a system of production and...
View Answer

Over the past forty years,the burden of federal taxation has

Correct Answer
verified

Regarding the Kyoto agreement and greenhouse gas emissions,which of the following is true?

Correct Answer
verified

Farm subsidies have traditionally had strong support in Congress,particularly from

Correct Answer
verified
B

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

Correct Answer
verified

A fiscal policy solution to inflation would be to

Correct Answer
verified

Advocates of deregulation are primarily concerned with

Correct Answer
verified

Judged in the context of the full range of public policies,the government in the United States has been

Correct Answer
verified

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

Correct Answer
verified

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

In The Wealth of Nations (1776) ,Adam Smith made all of the following arguments for laissez-faire capitalism,EXCEPT which of the following?

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What has been the preferred strategy of U.S.lawmakers for combating the problem of global warming?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Define the term monetary policy,and describe two ways the Fed implements monetary policy.

Correct AnswerverifiedMonetary policy is based on manipulation...View AnswerShow Answer

Define the term fiscal policy and explain how fiscal policy can be used in response to economic conditions.

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

Correct AnswerverifiedShow Answer

The highest rate of inflation (13 percent) since World War II occurred in ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Fiscal policy is a mechanism the government employs to influence the economy.Fiscal policy is based on

Correct AnswerverifiedShow Answer

Explain the difference between economic efficiency and economic equity as principles that justify government regulation of the economy.

Correct AnswerverifiedAn economy is a system of production and...View AnswerShow Answer

Over the past forty years,the burden of federal taxation has

Correct AnswerverifiedShow Answer

Regarding the Kyoto agreement and greenhouse gas emissions,which of the following is true?

Correct AnswerverifiedShow Answer

Farm subsidies have traditionally had strong support in Congress,particularly from

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

A fiscal policy solution to inflation would be to

Correct AnswerverifiedShow Answer

Advocates of deregulation are primarily concerned with

Correct AnswerverifiedShow Answer

Judged in the context of the full range of public policies,the government in the United States has been

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
B

Correct Answer
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Correct Answer
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Monetary policy is based on manipulation...
View Answer

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Correct Answer
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Correct Answer
verified
An economy is a system of production and...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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B

Correct Answer
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