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We the People Book Cover
We the People: A Concise Introduction to American Politics, 4/e
Thomas E. Patterson, Harvard University

Economic and Environmental Policy

Multiple Choice Quiz

Choose the best answer



1

Trust-busting is an example of regulation to promote:
A)efficiency.
B)laissez-faire capitalism.
C)collectivism.
D)equity
2

The case of the Savings and Loan industry in America illustrates all except which one of the following:
A)excessive government regulation can make it difficult for firms to respond effectively to new economic conditions by burdening them with bureaucratic guidelines and costly implementation procedures.
B)the issue of business regulation is not a simple question of whether or not to regulate.
C)the challenge of regulation is to achieve the proper balance between government controls and free-market mechanisms.
D)private investors should be left completely in control of the economy since government intrusion infuses dishonesty into business practices.
3

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 the:
A)Republican party took the lead in placing additional regulations on business.
B)aim was to regulate activities of firms of many types, not just those in a particular industry.
C)regulatory agencies were established in a way that prevented the president from having a role in their operations.
D)guiding principle was self-regulation: business was given wide leeway in deciding how it would comply with new requirements.
4

Government support for agriculture in the form of price supports and income subsidies:
A)increases farm production in order to meet the nation's food needs.
B)has been largely phased out by the 1996 Federal Agricultural Improvement and Reform Act (FAIR).
C)promote farm conservation in order to preserve the productive capacity of U.S. agriculture.
D)encourages rural development.
5

Keynesian economics emphasizes which of the following approaches as a means of curtailing economic downturns:
A)reduced taxes.
B)decreased government regulation.
C)increased government spending.
D)decreased inflation.
6

"Supply-side" economics was based primarily on:
A)stimulation of the business (supply) component.
B)government stimulation of consumer demands.
C)a repudiation of "trickle-down" theory.
D)increases in taxation.
7

The use of fiscal policy as an instrument for stimulating the economy has been restricted in recent years by:
A)emerging theories challenging the validity of the fiscal-policy model.
B)the conflicting fiscal-policy models employed by the Office of Management of Budget and the Congressional Budget Office.
C)the federal government's already large budget deficit, which has made it difficult for officials to increase spending as a means of encouraging economic growth.
D)Supreme Court decisions narrowing the fiscal authority of the national government.
8

The Federal Reserve Board is most directly charged with establishing which type of policy?
A)monetary
B)military
C)fiscal
D)budgetary
9

Monetary policy includes all of the following assumptions except:
A)control of the money supply is 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.
10

A major controversy surrounding the Federal Reserve's role in economic policy is:
A)the Fed's political accountability.
B)manipulation of the national economy.
C)the Fed's relationship to banking interests.
D)b and c only.
E)a, b and c.
11

Economic efficiency is measured by:
A)rejecting cost-benefit analysis of goods and services.
B)paying workers a wage above the value they add to production.
C)fulfilling as many of society's needs as possible while using as few of its resources as possible.
D)assuring free and fair economic transactions so all parties gain equally.
12

When customers do not pay all the costs that society has incurred in the production of goods and services, the unpaid costs are called:
A)economy.
B)externalities.
C)efficiency.
D)equities.
13

Government intervention in the economy occurs to:
  1. stimulate the economy.
  2. control inflation.
  3. adjust the money supply.
  4. address the national debt.
A)1 and 2.
B)3 and 4.
C)1 and 4.
D)2 and 3.
E)all the above.
14

The Democratic party would typically favor all except which one of the following economic policies when in office:
A)government spending to reduce inflation.
B)public jobs programs.
C)increased government spending for the employed.
D)increases in progressive tax rates for upper-income levels.
15

Government has aided labor over the years by legislating which of the following:
A)minimum wages and maximum work hour policies.
B)nondiscriminatory hiring practices.
C)unemployment benefits.
D)safer and more healthful working conditions.
E)all the above.
16

The purpose of Earth Day is to draw the public's attention to:
A)environmental issues.
B)deregulation of housing developers.
C)need to extend the dual use policy.
D)the space program.
17

Positive results from environmental regulation include which of the following:
A)improvement in air quality.
B)increased level of smog in cities.
C)improvement of water quality in some cities.
D)a and b.
E)a and c.