Economics Unit 4: Government Influence and Labor Markets

What course of action might a government take to respond to the downturn revealed in this graph?

decrease taxes to increase consumers money supply.

An organization whose members have a common cause for which they seek to influence public policy is called an…

interest group.

Which generalization best describes the information provided by this graph?

The United States faced an economic crisis that started in 2008.

Which is the best label for the first step in the process?

Identify a problem.

In a free enterprise system, governments address public problems through policy to ensure that…

citizens’ needs are met and protected.

The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same time. The combination of these challenges have resulted in a decrease in overall demand, causing a decline in GDP.

Who is most affected by the situation taking place within country D?

The government, workers, and businesses of Country D

The best conclusion that can be drawn from the graph is that the number of nonfarm jobs…

remained consistent over time.

What are the economic challenges that governments face? Check all that apply.

• threats of war

• unemployment

• low production

• inflation

• low voter turnout

What are the economic challenges that governments face? Check all that apply.

• threats of war

• unemployment

• low production

• inflation

• low voter turnout

In a free enterprise system, what are the goals of government? Check all that apply?

• to ensure safety for its citizens

• to ensure that citizens’ needs are met

• to stay out of all economic decisions

• to solve the problem of poverty

• to prevent citizens from getting rich

• to ensure that the market is fair

In a free enterprise system, what are the goals of government? Check all that apply?

• to ensure safety for its citizens

• to ensure that citizens’ needs are met

• to stay out of all economic decisions

• to solve the problem of poverty

• to prevent citizens from getting rich

• to ensure that the market is fair

Which of these statements describes what the diagram is showing?

Economic policy must reach a balance between needs and ideals.

Economic interdependence means that economic policies must balance the needs of…

governments, individuals, and businesses.

The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same time. The combination of these challenges have resulted in a decrease in overall demand, causing a decline in GDP.

According to the scenario, what is the greatest economic challenge that Country D is facing?

stagflation.

A government’s monetary policy is its plan to control…

the money supply

What is a primary economic goal of governments?

Reducing income inequality.

When an economy suffers from low production, a country cannot…

enjoy a steady rate of economic growth.

Rules ensuring that businesses offer safe products to consumers are part of a nation’s…

regulatory policy

Which of the following words can best be applied to this budget?

Balanced.

Which of the following words would be a good title for this diagram?

Fiscal Policy

Which of the following was the highest spending priority for the federal government in 2010?

Education/health and human services.

When a government creates budget, it is seeking a way to…

allocate money to programs and projects.

What does deficit spending require a government to do?

Take on debt.

In which period did the federal budget show the greatest deficit?

2000 to 2010.

What trend about the federal debt does the graph reveal?

It is increasing.

Spending that is required by law is known as…

mandatory spending.

Which of the following statement most accurately describes the federal government and its employees?

Millions of Americans work for the federal government.

What is the main goal in creating the federal budget?

Deciding how to manage the government’s tax revenue and expenditures.

Which of the following accurately explains the impact of an expansionary policy on interest rates, inflation, and unemployment?

Government spending with an expansionary policy can reduce interest rates and unemployment but can increase inflation.

At it's peak, government spending is made up about…

one quarter of GDP.

When revenues are higher than expenditures in a budget, that budget…

shows a surplus.

Gino writing a paper about the effects of fiscal policies on the economy. Gino is describing a fiscal policy that aims to improve inflation.

How does the policy that Gino is describing most likely affect interest rates and unemployment?

The policy would most likely increase interest rates and unemployment?

What does deficit spending require a government to do?

Take on debt.

Under an expansionary taxation policy, the government tries to stimulate economic growth by…

reducing taxes.

A(n) _____ is a tax issued by the federal government on imported goods.

• sales tax

• tariff

• excise tax

tariff

High government expenditures can lead to a bigger…

deficit.

Which terms best describe sales tax? Check all that apply

• direct

• indirect

• regressive

• progressive

• proportional

Which terms best describe sales tax? Check all that apply

• direct

• indirect

• regressive

• progressive

• proportional

Property taxes are usually determined based on…

the value of the property.

If expansionary taxation policies encourage growth, are they always appropriate to implement?

No, government services could encourage growth but other practices could be more effective based on the economic situation.

Which best explains how contractionary policies can hamper economic growth?

They reduce disposable income.

Which programs or projects are most likely funded by taxes paid by the citizens of the United States? Select three options

• constructing a highway

• public school funding

• developing a vacation resort

• building of private homes

• maintaining state parks

Which programs or projects are most likely funded by taxes paid by the citizens of the United States? Select three options

• constructing a highway

• public school funding

• developing a vacation resort

• building of private homes

• maintaining state parks

Under an expansionary taxation policy, the government tries to stimulate economic growth by…

reducing taxes.

According to the chart, the citizens are being taxed _____.

proportionally

How are progressive taxes and regressive taxes similar?

Both are determined based on income.

How is an excise tax different from a sale tax?

An excise tax applies to specific goods.

Governments collect taxes to ensure that…

citizens contribute to society’s needs.

Under a contractionary taxation policy, the government can reduce the deficit by…

increasing taxes.

If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of banks having more money to lend?

Interest rates will decrease.

Why does the Fed pay interest to banks?

It is interest on money held in reserve.

When the fed adjusts its interest rates, it directly influences consumer…

borrowing.

If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased?

Borrowing will increase.

What is the full name of the US central bank, known as the Fed?

The Federal Reserve Bank.

The _____ rate is the interest rate banks charge each other for borrowing or storing money.

• Federal Reserve Interest

• Federal funds

• Loan Interest

Federal funds

Which statement best describes how the Fed responds to recessions?

It increases the money supply.

Which of these is a banking activity of the Fed?

Storing money for banks.

Which best describes a central bank’s primary goals?

Limiting inflation and reducing unemployment.

Which best describes a central bank’s primary role?

Creating Monetary Policy.

The most efficient way to ensure that producers are responsible for products is through…

labeling.

Regulatory policy requires a balance between safety and…

protecting constitutional rights.

Which are duties of OSHA? Check all that apply

• investigating worker complaints

• inspecting imported food

• inspecting businesses

• labeling products

• protecting the environment

Which are duties of OSHA? Check all that apply

• investigating worker complaints

• inspecting imported food

• inspecting businesses

• labeling products

• protecting the environment

A goal of financial regulatory agencies is to…

prevent monopolies.

A purpose of government regulation in a mixed-market economy is to protect…

property rights.

A regulatory agency that protects workers is…

OSHA.

What makes enforcing safety standards a challenge for the Food and Drug Administration?

Many foods are imported from other countries, and the FDA must ensure those foods meet the same standards as US goods.

Which are results of regulation in a mixed-market economy? Check all that apply

• compliance with laws

• advantages for producers

• control of markets

• advantages for government

• control of externalities

Which are results of regulation in a mixed-market economy? Check all that apply

• compliance with laws

• advantages for producers

• control of markets

• advantages for government

• control of externalities

Regulatory agencies such as the OCC and the FDIC add _____ to the banking system.

• risk

• laws

• monopolies

• safety

safety

What must an entrepreneur assume when starting a business?

That clever market strategies may still fail to sell a product.

An entrepreneur must accent being accountable for the failure of the company because the entrepreneur is…

responsible for organizing the business.

What led to Henry Ford’s success as an entrepreneur?

His innovative production methods.

An entrepreneur would most likely be a…

person who works well alone.

Which characteristic of being an entrepreneur could be seen as both a benefit and a drawback?

financial risk.

What must an entrepreneur do after creating a business plan?

finance the business.

Successfully starting and running a business requires drive, talent, and clear vision of a long-range _____.

• goal

• problem

• loss

goal

How are Bill Gates and Henry Ford similar? Check all that apply

• They both streamlined factor production.

• They both became wealthy and successful.

• They both helped better the lifestyle of others.

• They both developed products that filled a human need or needs.

• They both founded a company when they were very young.

How are Bill Gates and Henry Ford similar? Check all that apply

• They both streamlined factor production.

• They both became wealthy and successful.

• They both helped better the lifestyle of others.

• They both developed products that filled a human need or needs.

• They both founded a company when they were very young.

An entrepreneur is someone who…

starts and runs a business.

What can the reader conclude from the graph?

A company offering physical therapy most likely has only an 80 percent of surviving for at least two years.