Question 1

The Federal Reserve System

Accepted Answer

A)   was created in 1933.
B)   is run by a congressional committee.
C)   regulates only national banks.
D)   was created specifically to conduct fiscal policy.
E)   None of these answers is correct.F) A) and B)
G) B) and E)

Question 2

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

Question 3

Which of the following is correct about environmental policy?

Accepted Answer

A)   The national parks are subject to a dual use policy of preservation, recreation, and exploitation of the rich natural resources.
B)   The Environmental Protection Agency was elevated to cabinet status in 1998 by President Clinton and the Republican Congress.
C)   Environmental regulation has done little to improve air and water quality.
D)   Policymakers always give more consideration to environmental protection than to economic development when the two conflict.
E)   None of these answers is correct.F) A) and B)
G) All of the above

Question 4

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 E)
G) B) and D)

Question 5

Members of the Federal Reserve Board

Accepted Answer

A)   serve for variable terms and are exposed to high levels of political pressure.
B)   have no power to refuse congressional requests for information.
C)   are appointed by the president and can be removed by the Senate.
D)   are appointed by Congress and can be removed by Congress.
E)   are appointed by the president and are not subject to removal.F) A) and B)
G) None of the above

Question 6

What did Congress do in 1995 to reduce overregulation?

Accepted Answer

A)   It cut funding for regulatory agencies like the EPA and Securities and Exchange Commission.
B)   It passed the Airlines Deregulation Act, which eliminated government-set airfares and the requirement that airlines provide service to smaller-sized cities.
C)   It restricted the president's ability to directly request administrative regulations from agency heads.
D)   It cut the budget of the Food and Drug Administration.
E)   It enacted legislation that prohibits administrators in some instances from issuing a regulation unless they can show that its benefits outweigh its costs.F) C) and E)
G) A) and B)

Question 7

The tax cuts pushed by President George W.Bush while in office were premised largely on

Accepted Answer

A)   demand-side economics.
B)   supply-side economics.
C)   fiscal policy.
D)   monetary policy.
E)   Keynesian economics.F) B) and D)
G) A) and E)

Question 8

If the economic problem is low productivity and high unemployment,the fiscal policy action on the demand side would be to

Accepted Answer

A)   increase taxes.
B)   cut business taxes.
C)   increase spending.
D)   decrease spending.
E)   None of these answers is correct.F) D) and E)
G) A) and E)

Question 9

Which of the following statements is true?

Accepted Answer

A)   The national debt was eliminated in 1998.
B)   The chair of the Fed creates the president's budget on an annual basis.
C)   Keynes advocated government spending to counteract an economic downturn.
D)   The highest budget deficit in U.S. history was $59 billion.
E)   The Congressional Budget Office creates the president's budget on an annual basis.F) B) and E)
G) B) and D)

Question 10

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

Question 11

Regulatory activity relating to the environment has actually meant that the environment today is

Accepted Answer

A)   no better than it was during the 1960s.
B)   actually worse than it was during the 1960s.
C)   vastly more clean than it was during the 1960s.
D)   so free from pollution that further regulatory activity in the future seems pointless.
E)   None of these answers is correct.F) C) and D)
G) A) and B)

Question 12

The Federal Reserve plays a large part in establishing ________ policy.

Accepted Answer

A)   monetary
B)   military
C)   fiscal
D)   budgetary
E)   securityF) A) and D)
G) A) and C)

Question 13

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) A) and E)
G) A) and D)

Question 14

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)   None of these is correct; federal spending has reached high levels only sporadically.F) A) and C)
G) A) and E)

Question 15

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 employer.
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) D) and E)
G) C) and D)

Question 16

The Progressive Era of government regulation focused on

Accepted Answer

A)   strengthening consumer protection by preventing credit agencies from gouging individuals with high levels of debt.
B)   bolstering worker safety by increasing the power of unions and forcing better safety practices on businesses.
C)   increasing environmental protection and strengthening the EPA.
D)   regulating troubled economic sectors, such as banking.
E)   stopping the unfair business practices of the new monopolies, such as the railroads.F) C) and D)
G) B) and D)

Question 17

Monetary policy differs from fiscal policy in that

Accepted Answer

A)   it has to be exercised by the legislature.
B)   the policy goals are very different.
C)   it is a slower process than fiscal policy.
D)   it can be implemented more quickly than fiscal policy.
E)   None of these answers is correct.F) B) and E)
G) A) and B)

Question 18

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) A) and D)
G) A) and C)

Question 19

Government support for agriculture in the form of price supports and income subsidies is designed primarily to

Accepted Answer

A)   increase farm production in order to meet the nation's food needs.
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) A) and D)
G) A) and B)

Question 20

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

Exam 15: Economic and Environmental Policy: Contributing to Prosperity

Members of the Federal Reserve Board

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Which of the following statements is true?

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The tax cuts pushed by President George W.Bush while in office were premised largely on

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The Federal Reserve plays a large part in establishing ________ policy.

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The Superfund program is designed to

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Monetary policy differs from fiscal policy in that

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When the Fed was created in 1913,

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Which of the following is correct about environmental policy?

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What did Congress do in 1995 to reduce overregulation?

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The Progressive Era of government regulation focused on

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The Federal Reserve System

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

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Monetary policy includes all the following assumptions EXCEPT that

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Government support for agriculture in the form of price supports and income subsidies is designed primarily to

Correct AnswerverifiedShow Answer

Regulatory activity relating to the environment has actually meant that the environment today is

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

Correct AnswerverifiedShow Answer

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

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Supply-side economics is based primarily on

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

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If the economic problem is low productivity and high unemployment,the fiscal policy action on the demand side would be to

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