Inquizitive: Chapter 16. Economic Policy

What is the correct definition of gross domestic product (GDP)?

total value of goods and services produced within a country

Federal Deposit Insurance Corporation (FDIC)

protect bank accounts against bank closures, up to $250,000 per account

Congressional Budget Office (CBO)

provide independent expertise on budgeting to the legislative branch

Office of Management and Budget (OMB)

provide independent expertise on budgeting to the executive branch

Federal Reserve

manipulate the money and credit supply in the country

Which of the following are examples of government policies that promote alternative technologies?

subsidies for solar panel manufacturers

providing tax incentives for producing clean energy

Which items are examples of public goods?

interstate highway system

public schools

national defense

Which of the following are tools that the Federal Reserve can use to carry out monetary policy?

changing the federal funds rate.

engaging in open-market operations

Put the following budget categories in order from the one that takes up the largest percentage of the federal budget to the one that takes up the smallest percentage of the federal budget.

mandatory spending such as Social Security and Medicare

discretionary spending such as welfare, education, and foreign aid

interest on the national debt

Which statement about the federal minimum wage is correct?

the value of the nominal federal minimum wage has decreased due to inflation

laissez-faire capitalism

The best thing the government can do for the economy is stay out of it as much as possible.

Keynesianism

The government can control the business cycle by strategically spending or changing the tax rate.

supply-side economics

Lower taxes lead people to work harder, which increases overall revenue for the government.

The government drew on the lessons from supply-side economics in its stimulus payments to the public during the COVID-19 crisis.

false

At different times in American history the federal government has relied on certain taxes more than others. Which taxes were more relied upon in the nineteenth century, and which more so in the twentieth and twenty-first centuries?

individual income tax

social insurance tax

Which of the following parts of the federal government played a major role in stabilizing the economy after the 2008 economic crisis?

the Treasury Department

the president

Congress

the Fed

Epic Games filed a lawsuit after Apple removed a version of its battle royale game Fortnite from the App Store. Epic Games is seeking injunctive relief to "allow fair competition" in mobile app distribution. What is the basis of their lawsuit?

antitrust policy

The government passed the CARES Act to address the economic fallout of the COVID-19 pandemic. Which of these provisions were included in the legislation?

one-time payments to individuals and families

student loan relief allowing borrowers to defer payments

expanded unemployment insurance

Which of the following are examples of the government promoting market stability?

Congress enacts laws that protect people from economic fraud.

The Securities and Exchange Commission provides a transparent and safe capital market.

The court system protects intellectual property rights.

What are the effects of free trade?

It can open new markets for producers.

The foreign competition it promotes can impose costs on particular economic sectors or societal groups.

It can provide consumers with a greater variety of higher-quality products at lower prices.

Which of the following taxes are regressive taxes and which are progressive taxes?

income tax

wealth tax on assets above $50 million

- can affect the total amount of credit through the interest, known as - , that member banks charge one another for loans.

THE FED

THE FEDERAL FUNDS RATE

Imagine that the nation has just entered an unexpected recession. Place the following items in the order in which we would expect them to occur according to a textbook approach to monetary policy.

The Federal Reserve lowers the target for the federal funds rate.

Consumer interest rates decrease.

The number of businesses and individuals taking out loans increases.

Economic growth recovers.

The Federal Reserve raises the target for the federal funds rate.

Promote Stable Markets

Congress enacts a single national regulation for car emissions.

protect employees and consumers

Congress calls the head of General Motors to testify over faulty car ignition systems.

promote business development

The government awards over one billion dollars in funding to microchip consortium Sematech.

promote economic prosperity

The National Science Foundation awards millions of dollars in research grants.

Which of the following methods have been considered by the federal government to deal with climate change?

mitigation by reducing emissions

promoting alternative technologies

adapting to climate change

Which environmental policy actions did the Trump administration undertake?

repealed Clean Power Plan

announced plans to withdraw from the Paris Climate Accord

According to Keynesian economic theory, what kinds of actions should government take to achieve full employment?

a tax cut that would put money into the hands of the American public

creation of public works jobs such as those created during the New Deal

Which of the following are examples of public policy?

a law passed by Congress

a federal rule issued by an agency

a court ruling

a presidential order

Which economic theory adopts the idea that cutting the marginal tax rate can actually increase government revenue?

Supply-side economics

Which region has the highest percentage of zip codes in economic distress?

south

Place these states in order from those with the most opportunity zones per 1,000 people to those with the fewest opportunity zones per 1000 people.

Colorado

California

Kentucky

Wisconsin

Connecticut

Those states with the greatest opportunity zones per 1,000 people also have the highest levels of poverty.

false

Which are important sources of economic growth?

innovation

public investment in infrastructure

sufficient and productive workforce

- is the policy of reducing or eliminating regulatory constraints on the conduct of individuals or private institutions. - administrations engage in this most often.

Deregulation

Republican

What does the government achieve through its use of contracting?

encouraging desirable corporate behavior

building up sectors of the economy

purchasing goods and services

Identify whether these programs are considered mandatory spending or discretionary spending.

Mandatory Spending:

Medicare

Social Security

Discretionary Spending:

foreign aid

Pell grants to college students

bridge upgrade funds

What economic goal does the Securities and Exchange Commission (SEC) help the government achieve the most?

promote economic prosperity

President Trump's tax cut disproportionally benefited - income people, making the income tax less -

high

progressive

Which of the following statements about gross domestic product (GDP) are true?

It is a traditional measure of a country's economic growth.

It is a measure of growth that excludes foreign investments.

What influence can the National Science Foundation and the National Institutes of Health have on economic growth?

they promote innovation

Despite the party conflict, Congress is regularly able to pass a yearly budget.

false