POSI 2320 – Exam II Review Flashcards

A comprehensive set of question-and-answer flashcards summarizing the key economic, social, health, and policy topics covered in the POSI 2320 lecture notes for Exam II preparation.

What is the largest source of revenue for Texas State University?

Federal revenue (followed by tuition and fees).

What is currently the largest source of student aid for university students?

Institutional grants.

What was at issue in Biden v. Nebraska (2023)?

President Biden’s plan to waive certain amounts of student debt.

List three ways universities try to control costs.

Increasing enrollment, offering internet courses, using larger classes (others include reducing course offerings, relying on teaching assistants, travel reductions, and hiring freezes).

What is the current U.S. unemployment rate?

4.1 percent.

What is the current U.S. labor-force-participation rate?

62.3 percent.

Differentiate between the federal deficit and the federal debt.

The deficit is the annual excess of expenditures over revenues; the debt is the total accumulated deficits owed by the government.

What is the current size of the U.S. national debt?

About $37.1 trillion.

What is the current U.S. debt-to-GDP ratio?

Roughly 124 percent.

Name three dangers associated with a large federal debt.

Fewer policy choices, potential tax increases that discourage production, and higher inflation risk.

Which foreign country holds more U.S. debt than any other?

Japan.

Is there a strong correlation between federal spending and the poverty rate?

Yes; increased federal spending is typically associated with a lower poverty rate.

Distinguish between mandatory and discretionary spending.

Mandatory spending is set by law (entitlements) and not controlled by the annual appropriations process; discretionary spending is appropriated yearly by Congress.

How does baseline budgeting differ from zero-based budgeting?

Baseline budgeting builds on the previous year’s budget; zero-based budgeting starts each cycle at zero and justifies every expense.

What role does the OMB play in the budget process?

The Office of Management and Budget compiles and prepares the president’s proposed federal budget using agency requests.

How many federal programs directly target poverty, and how much is spent?

About 13 programs, costing roughly $1.39 trillion annually.

Is Texas’s poverty rate higher or lower than the national average?

Higher.

What percentage of Americans were officially in poverty in 2024?

Approximately 11.5 percent.

What does TANF stand for, and whom does it help?

Temporary Assistance to Needy Families; it assists low-income families.

List three examples of mandatory (uncontrollable) spending items.

Social Security, Medicare, and interest on the national debt.

What are entitlements, and who receives most of the benefits?

Government benefits set by eligibility rules; about two-thirds go to the elderly through Social Security and Medicare.

What is the single largest spending item in the federal budget?

Social Security.

Give two proposals to reform Social Security.

Privatization of accounts, raising the wage cap, immigration reform, increasing eligibility age, or altering benefit formulas.

Would reducing Social Security benefits potentially violate the ‘compact’ with seniors?

Yes, critics argue it would break the longstanding social agreement with older Americans.

Does the United States have the highest life expectancy in the world?

No.

Does the United States have the lowest infant-mortality rate in the world?

No.

How much does the U.S. spend per person on health care?

About $13,493 per capita.

Does the United States have the world’s highest obesity rate?

Yes.

What is socialized medicine?

Government ownership of health-care facilities and employment of medical staff (e.g., the VA).

What is a single-payer system?

A system in which the government (through taxpayers) finances health care for eligible citizens (e.g., Medicare, Medicaid).

What is an out-of-pocket health-care system?

Patients pay directly when they have no insurance or government coverage.

What percentage of U.S. residents lacked health insurance before Obamacare, and what is it now?

Roughly 16 percent before; about 9 percent after.

Name two groups most likely to lack health insurance.

Young adults and low-income individuals without employer coverage.

Who is eligible for Medicare? Medicaid?

Medicare is for the elderly; Medicaid is for the poor.

Which president signed Medicare and Medicaid into law?

Lyndon B. Johnson.

On average, how do Medicare taxes paid compare with expected benefits?

The average recipient pays about $100,000 in taxes but is projected to receive roughly $300,000 in benefits.

What is the Affordable Care Act’s individual mandate?

A (formerly enforced) requirement that most individuals obtain health insurance or face a penalty.

What is the employer mandate under the ACA?

Employers with 50 or more full-time workers must offer health insurance or pay a fine.

Did Texas choose to expand Medicaid under the ACA?

No.

List two reasons health-insurance costs keep rising.

Cost-shifting, defensive medicine, covering pre-existing conditions, and high administrative costs.

Name a major ACA provision that was later repealed or weakened.

The individual mandate penalty was eliminated; contraceptive-coverage requirements were narrowed.

In which constitutional amendment is the Free Exercise Clause located?

The First Amendment.

Which test did the Supreme Court apply in West Virginia v. Barnette (1943)?

Compelling-interest test.

Which test did the Court apply in Employment Division v. Smith (1990)?

General-applicability test.

When the federal government allegedly violates religious freedom, which test is used?

The compelling-interest test.

Which test was used in Burwell v. Hobby Lobby (2014)?

Compelling-interest test.

Define defensive medicine.

Ordering tests or treatments mainly to protect a physician from malpractice suits rather than to benefit the patient.

What is ‘tort reform’?

Legal changes aimed at reducing frivolous lawsuits and limiting damages.

Which political party is more likely to favor universal health care?

The Democratic (liberal) Party.

What is the largest single source of federal revenue?

Individual income taxes (about 49 percent).

Which tax is typically the largest for ordinary American workers?

Social Security payroll tax.

What happened when the U.S. had the highest corporate-tax rate before 2017?

Firms moved jobs and investment overseas.

Give two major provisions of the Tax Cuts and Jobs Act of 2017.

Reduced individual rates, doubled child tax credit, capped state-and-local deductions, cut corporate rate from 35 % to 21 %, repealed ACA individual mandate.

List two features of the ‘Big Beautiful Bill of 2025.’

Extension of 2017 tax cuts, higher child tax credit ($2,200), larger SALT deduction cap, Medicaid work requirements, deductions for tips and overtime, border-wall funding.

What share of income-tax revenue is paid by the top 50 percent of taxpayers?

About 97 percent.

What are capital gains taxes?

Taxes on profits from selling assets such as stocks or real estate.

Give one argument in favor of a flat income tax.

Simplicity, universality (no loopholes), or perceived fairness.

Give one argument for replacing the income tax with a national sales tax.

Simplicity, taxing consumption over saving, capturing underground-economy transactions, and encouraging income-producing activity.

In the short term, what happens to the deficit if Congress enacts spending cuts?

The deficit decreases (debt growth slows).

Which party generally favors spending cuts?

Republicans.

Which party generally favors tax increases as budget policy?

Democrats.

Briefly describe classical economic theory.

The market is a self-adjusting mechanism requiring minimal government intervention (laissez-faire).

Summarize Keynesian economics in one phrase.

Government should create demand through spending deficits to combat recessions.

What is the core idea of supply-side economics?

Tax cuts and reduced regulation increase productivity and investment, eventually boosting revenue (‘trickle-down’).

What is monetary economics?

Fine-tuning the economy by regulating the money supply (largely via the Federal Reserve).

Who is associated with articulating laissez-faire economics?

Adam Smith.

Who is the current Chair of the Federal Reserve?

Jerome Powell.