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Q:
Congress passed the Federal Reserve Act in 1913 to
A.regulate the national banking system and provide flexibility to the money supply.
B.encourage the production of domestic and offshore oil reserves.
C.wean the United States off the gold standard.
D.ensure that the federal budget was balanced.
E.create a six-month supply of currency backed by gold bullion and stored at Fort Knox.
Q:
Economic regulation includes regulation of
A.business.
B.health care.
C.income security.
D.poverty.
E.education.
Q:
The federal government enacted the income tax
A.because it had no other means of raising revenue except for voluntary contributions from the states.
B.so that the federal government and the state governments would be using similar tax mechanisms, which would facilitate tax collection.
C.to pay for an expanding role for government.
D.to ensure that businesses paid their fair share of taxes.
E.to simplify the labyrinth of sometimes contradictory tax structures that had been enacted.
Q:
Of the following revenue sources, which accounts for the largest percentage of the federal government's revenue?
A.excise taxes
B.corporate income taxes
C.individual income taxes
D.gasoline taxes
E.property taxes
Q:
Member banks who borrow money from their Federal Reserve Bank are charged interest at the
A.subprime rate.
B.federal rate.
C.discount rate.
D.bond rate.
E.austere rate.
Q:
Under a laissez-faire system, which of the following policies is the government most likely to pursue?
A.Social welfare programs
B.Banking regulations
C.High-speed rail transportation
D.Health care for the elderly
E.Deregulation
Q:
Which of the following would be an example of fiscal policy?
A.intentionally running a budget deficit to spur economic growth
B.cutting the prime interest rate to encourage investment
C.engaging in open market operations
D.inflating the value of government assets to increase real estate prices
E.purchasing consumers' credit card debt to prevent personal bankruptcies
Q:
Open market operations are when the Federal Reserve Bank buys or sells
A.credit card debt.
B.subprime mortgages.
C.defaulted loans.
D.government securities.
E.mutual funds.
Q:
Monetary policy refers to government control of
A.the banking and computer industries.
B.the money supply and interest rates.
C.taxing and spending policies.
D.equities and securities.
E.bonds and deficits.
Q:
Which of the following is an example of urban policy?
A.farm subsidies
B.disaster relief
C.emergency response
D.road construction
E.tariffs
Q:
Which of the following was the primary purpose of the Freedom to Farm Act of 1996?
A.to reduce farm subsidies and provide fixed payments to farmers
B.to issue interest-free loans to farmers
C.to increase the efficiency of farming techniques and profitability
D.to reduce Americans' dependence on agriculture
E.to retrain farmers for industrial jobs
Q:
What percentage of the American civilian labor force could still be classified as farmers?
A.less than 1 percent
B.4 percent
C.11 percent
D.22 percent
E.30 percent
Q:
Which of the following is NOT a method or purpose of the Federal Reserve?
A.to set the discount rate
B.to control the supply of money
C.to control inflation
D.to stimulate the economy
E.to control the profits of private banks
Q:
Through its practices of buying and selling government securities, the Federal Reserve controls the money supply in the United States. This process is referred to as
A.profit control.
B.open market operations.
C.capitalism.
D.socialism.
E.forced fiscal policy.
Q:
As a regulatory tactic, all member banks nationwide are charged an amount to borrow short-term funds. This amount dictates the interest rate to the customer and the amount of money flowing into the economy, and is referred to as
A.the discount rate.
B.the monetary average.
C.fiscal reconciliation.
D.federal profiteering.
E.the CD rate.
Q:
Since 1913, this agency has acted as the regulator of monetary policy in the United States.
A.New York Stock Exchange
B.World Bank
C.Office of Management and Budget
D.U.S. Treasury
E.Federal Reserve System
Q:
What is the means by which the government controls the supply and price of money in the economy?
A.distributive policies
B.redistributive policies
C.monetary policy
D.tax policy
E.mandated revenue
Q:
Which of the following is NOT a category of the federal government's discretionary spending?
A.military
B.roads
C.education
D.social security benefits
E.law enforcement
Q:
Federal spending that is not controlled by annual budget decisions, such as entitlements, is referred to as
A.outlays.
B.budgetary lay-asides.
C.non-discretionary revenues.
D.mandatory spending.
E.discretionary funds.
Q:
The amount of money that a government agency is authorized to spend in a single year is called
A.revenue.
B.outlay.
C.budget authority.
D.bidding.
E.fiscal distribution.
Q:
Approximately what percentage of overall revenues are collected through the social security tax?
A.less than 1 percent
B.5 percent
C.15 percent
D.35 percent
E.55 percent
Q:
How does a flat tax differ from a regressive tax?
A.Flat taxes are illegal in the United States but are widely used in Europe.
B.Flat taxes are attached only to the sale of goods and services.
C.Flat taxes tax all entities at the same rate as a proportion of income, whereas with regressive taxes the rate changes according to income level.
D.Flat taxes bring in far less revenue than do regressive taxes.
E.Flat taxes are very popular with Americans, whereas, regressive taxes are not.
Q:
The best example of a regressive tax is
A.individual income taxes.
B.sales tax.
C.tax credits.
D.admission charges to state and federal parks.
E.corporate income tax.
Q:
Individual income tax with a rate that increases as the amount of income gets larger is a(n)
A.regressive tax.
B.progressive tax.
C.tax credit.
D.income tax surcharge.
E.income penalty.
Q:
What are tax policies that theoretically promote the interests of all economic classes equally, such as taxes for roads, parks, and police?
A.earned income credits
B.gas taxes
C.distributive tax polices
D.redistributive tax policies
E.equitable distribution
Q:
The federal government's taxation policy that mirrors Robin Hood's "taking from the rich and giving to the poor" is
A.redistributive tax policies.
B.distributive tax policies.
C.reducing tax burden for the poor.
D.welfare benefits.
E.trickle-down theory.
Q:
The U.S. Constitution requires that all appropriations legislation must originate
A.at the state level.
B.with the president.
C.with the Congressional Budget Office.
D.in the U.S. House of Representatives.
E.in the Supreme Court.
Q:
What is a part of the Executive Office of the President that creates an annual budget proposal based on the president's program?
A.U.S. Treasury
B.Congressional Budget Office (CBO)
C.Office of Management and Budget (OMB)
D.General Accounting Office (GAO)
E.White House Chief of Staff
Q:
What are guaranteed government benefits that certain citizens depend upon for subsistence?
A.tax cuts
B.income tax refunds
C.entitlements
D.food stamps
E.corporate welfare
Q:
What is an indicator of how badly the economy is performing, measured by adding the inflation rate to the unemployment rate?
A.misery index
B.consumer confidence rating
C.economic depth gauge
D.national pessimism indicator
E.trade deficit
Q:
The _____ measures the sum of the money gained in a given economy by selling exports, minus the cost of buying imports.
A.international confidence rating
B.balance of trade
C.national debt
D.consumer confidence rating
E.federal budget
Q:
What is the measurement of the public's evaluation of the economy determined by using a public opinion poll that gauges feelings about personal income and financial security?
A.census
B.consumer willingness pricing
C.consumer confidence index
D.the NASDAQ
E.Standard & Poor's 500 Index
Q:
How are housing starts, or new construction, used to gauge the national economy?
A.Construction of apartments instead of single family homes indicates less money available in the economy.
B.Declines in housing starts are often one of the first signs of an approaching economic downturn.
C.Building supplies are the most profitable industry in the nation.
D.Decreases in demand for single-dwelling homes usually indicates a higher demand for condominiums and other multi-unit construction.
E.Decreases in the average price of new homes indicates a strong economy.
Q:
The most widely accepted and utilized indicator of the overall condition of the stock market on any given day is
A.the Congressional Accounting Office.
B.the White House press releases.
C.the Wall Street Journal.
D.the Dow Jones Industrial Average.
E.the prime rate.
Q:
In recent years the amount of interest that the federal government pays on its debt obligations comes to about how much for every man, woman, and child in the United States?
A.50 cents
B.$300
C.$1,000
D.$100,000
E.$1 million
Q:
In the most recent year reported, the federal government's cost on interest alone for its outstanding debt was about
A.$3 million.
B.$125 million.
C.$1 billion.
D.$350 billion.
E.$10 trillion.
Q:
What is the total sum of the outstanding debt obligations of the United States government, such as treasury notes and treasury bills?
A.budget deficit
B.balance of trade
C.national debt
D.gross domestic product
E.monetary system
Q:
Which of the following is generally agreed to be an appropriate cause for a federal budget deficit?
A.temporary unexpected surge in spending due to a national emergency
B.increase is social entitlement programs for the poor
C.long-term subsidies for farmers
D.permanent increase in student tuition assistance
E.creating permanent tax cuts for all income brackets
Q:
The amount of money spent by the government over and above what it collects in taxes and other revenue in a single year is referred to as
A.budget surplus.
B.budget deficit.
C.federal deprofiting.
D.Deflation.
E.positive retail impact.
Q:
What is the level that the unemployment rate in the United States rarely exceeds in any given year?
A.2 percent
B.4 percent
C.10 percent
D.25 percent
E.40 percent
Q:
Which of the following is NOT a factor that could tend to make the reported unemployment rate unreliable?
A.unemployed citizens who are not seeking employment
B.determining the rate of temporary seasonal employment
C.voluntary job changes
D.routine shifts in economic conditions that help some businesses but hurt others
E.increased layoffs at the largest employer
Q:
What level does the federal government consider a realistic minimum unemployment rate nationwide?
A.0.5 percent
B.1 percent
C.5 percent
D.12 percent
E.20 percent
Q:
The Consumer Price Index (CPI) is
A.a ratio that is based on market values that is used by insurance companies to set rates on businesses.
B.a government comparison of prices across major department stores.
C.the total of all annual sales in the private retail sector.
D.an index of prices for goods and services regularly traded in the economy.
E.a government issued tool for fixing prices in the private sector.
Q:
What is one practical use by the federal government for the Consumer Price Index (CPI)?
A.A decrease in CPI means that the government must cut salaries.
B.It helps determines the cost of living increases in federal employee salaries and social security benefits.
C.It helps determines whether to raise taxes.
D.It determines whether the government is paying too much for services.
E.An increase in CPI triggers an increase in the regulation of the largest private companies.
Q:
An estimate of the total money value of all of the goods and services produced in a given one-year period is the
A.inflation rate.
B.tax base.
C.gross domestic product.
D.foreign product ratio.
E.ratio of goods to services.
Q:
The primary argument of supply-side economic theory is
A.that too much demand for services will cause the supplier side to crash.
B.that there must be a supply of goods before there is a demand.
C.that high taxes take money out of the economy that would otherwise be invested in goods and services.
D.that high taxes give government the funds it needs to stimulate the economy.
E.that the capitalist system is self-destructive.
Q:
An economic slowdown characterized by higher unemployment, reduced productivity, or some other negative economic indicators is
A.inflation.
B.recession.
C.stigmatization.
D.economic morbidity.
E.stagnation.
Q:
One major factor that served as a catalyst to lift the United States out of the Great Depression of the 1930s was
A.the onset of World War II.
B.the Supreme Court ruling in Brown v. Board of Education.
C.a major depression in Europe.
D.federal deregulation.
E.an increased education level nationwide.
Q:
The term "laissez-faire" refers to an economic doctrine that was popular in the eighteenth and nineteenth centuries. The French term literally means
A."remove the government."
B."the government is the father."
C."tax cut."
D."leave us alone."
E."life is a circus."
Q:
Which of the following is NOT a purpose of the federal budget?
A.It creates a comprehensive plan laying out what the government will spend for various programs.
B.It sets limits on the profitability of key industries and service companies.
C.It sets priorities for the government.
D.It details how the government expects to raise money.
E.It manages and implements the fiscal policy.
Q:
Consistent increases in the prices of goods and services is referred to as
A.fiscal policy.
B.price fixing.
C.inflation.
D.cost modification.
E.scaling.
Q:
What is a policy that deals with how to raise revenue through taxation and how to spend the revenue generated?
A.budgeting
B.economic manipulation
C.political prioritization
D.social policy
E.fiscal policy
Q:
What is a "think-tank"?
A.a government trust fund that supplies scholarships for low income youth
B.a military intelligence agency
C.an organization that does intensive research and problem solving, either on behalf of other entities, or on their own
D.a group of college professors that form associations to influence law
E.a slang term using a slight to refer to a large university
Q:
What is a public interference into the economy that seeks to settle disputes that arise between competing private companies and is designed to break market dominance by one or more companies?
A.public policy
B.antitrust legislation
C.capitalist projection
D.monopoly advocacy
E.economic interdiction
Q:
A set of laws, regulations, and rules that affect the whole of society is referred to as
A.Keynesian principle.
B.dominance code.
C.statutory control.
D.federalist code.
E.public policy.
Q:
What is an economic theory, widely accepted prior to the 1930s, that advocates the economy is a self-adjusting mechanism that works best without government interference of any kind?
A.trickle-down theory
B.laissez-faire theory
C.Keynesian economics
D.Roosevelt theory
E.capitalism
Q:
What is an economic theory that is based on the principle that taxation, government spending, and other forms of intervention in the economy can help spur the economy forward, even during bad economic times?
A.trickle down theory
B.laissez-faire economics
C.Keynesian economics
D.open economy theory
E.progressive taxation
Q:
Discuss the 2008 presidential general election campaigns. Why did the winner win and the loser lose? What could the losing campaign have done to change the outcome?
Q:
What are the rules regarding campaign finance for presidential elections? Do they work? Why or why not? How should they be changed?
Q:
How have campaign finance laws evolved? In what ways do current laws influence campaign finance?
Q:
Through much of U.S. history, citizens of the District of Columbia were not allowed to vote in presidential elections. When and how did this change? Is the District of Columbia included in the Electoral College?
Q:
Discuss the concept of "power of the incumbency." What is meant by the term? Do you feel that it is a realistic phenomenon? What advantages would an incumbent have over an inexperienced challenger?
Q:
Describe the major stages or steps that an individual candidate experiences between his/her first serious interest in the upcoming presidential election to the point of winning or losing the election.
Q:
Describe the various methods for funding a presidential campaign. How does the federal government regulate such campaign funding?
Q:
How is the number of electoral votes determined for each state? Many states have debated changes to the process by which electoral votes are awarded. Can such changes be made and, if so, what are options?
Q:
In ________, the Supreme Court ruled that the First Amendment entitles candidates to spend as much of their own money on their campaigns as they want to.
A.McConnell v. Federal Election Commission
B.Federal Election Commission v. Wisconsin Right to Life
C.Robert v. Friedenberg
D.Bush v. Gore
E.Buckley v. Valeo
Q:
During the 2008 presidential campaign, Americans were the most skeptical about John McCain's
A.experience.
B.military background.
C.patriotism.
D.Jewish ancestry.
E.ability to relate to ordinary Americans.
Q:
During the 2008 presidential campaign, Americans were the most skeptical about Barack Obama's
A.poise.
B.ability to hold up under pressure.
C.eloquence.
D.experience.
E.ability to relate to ordinary Americans.
Q:
In Buckley v. Valeo, the Supreme Court ruled that
A.public financing of political campaigns was unconstitutional.
B.political action committees (PAC) are unconstitutional.
C.campaigns do not need to identify contributors.
D.campaign spending is legally considered freedom of speech.
E.documented immigrants may run for political office.
Q:
Political action committees (PAC) contribute
A.about as much to presidential candidates as they do to congressional candidates.
B.about half as much to presidential candidates as they do to congressional candidates.
C.much more to congressional candidates than they do to presidential candidates.
D.most of their money to presidential candidates and almost nothing to congressional candidates.
E.more money to challengers than they do to incumbents.
Q:
How does the Bipartisan Campaign Reform Act affect political action committees (PAC)?
A.PACs are prohibited from giving money to incumbents.
B.PACs are prohibited from giving money to challengers.
C.PACs must use corporate or union contributions for electioneering communications only.
D.PACs must use corporate or union contributions for administrative costs only.
E.PACS are prohibited from giving candidates money within 90 days of an upcoming election.
Q:
There are approximately ________ political action committees (PAC) registered with the Federal Election Commission.
A.2,000
B.4,000
C.6,000
D.8,000
E.10,000
Q:
The goal of campaign finance laws is to
A.create equality in funding.
B.make campaigns affordable.
C.limit the influence of individuals or groups over public officials.
D.promote freedom of speech.
E.increase public interest in politics.
Q:
George W. Bush used ________ to defeat John McCain in the 2000 primary.
A.legal soft money
B.illegal hard money
C.contributions from Buddhist monks
D.federal campaign contributions
E.illegal soft money
Q:
The sponsors of the 2002 campaign finance reform bill were
A.Mitch McConnell and John Edwards.
B.John McCain and Russ Feingold.
C.John Edwards and John McCain.
D.Russ Feingold and Mitch McConnell.
E.Mitch McConnell and John McCain.
Q:
The Federal Election Campaign Act (FECA) explicitly called for
A.soft money.
B.527 groups.
C.disclosure requirements.
D.full public financing of all campaigns.
E.partial public financing of congressional campaigns.
Q:
In 2008, the political parties raised
A.about $100 million.
B.about $500 million.
C.about $700 million.
D.about $1 billion.
E.about $2 billion.
Q:
Who is eligible for matching funds?
A.Incumbents running for reelection in the House
B.Incumbents running for reelection in the Senate
C.Challengers running for a House seat
D.Challengers running for a Senate seat
E.Presidential candidates who meet certain requirements
Q:
How does front-loading affect the nomination process?
A.It has a negative impact on voter perceptions.
B.It makes fundraising easier.
C.It benefits the front-runners.
D.It attracts more public scrutiny.
E.It makes the process more democratic.
Q:
A seat in the U.S. House of Representatives may be considered a "safe seat." In the 2006 mid-term election about what percentage of the entire 435 seats was considered as having a probability of either party winning the seat?
A.less than 5 percent
B.15 percent
C.30 percent
D.50 percent
E.80 percent