American Government 100 - Fullerton College



American Government 100 Part IV

Patterson, pgs. 525-545, AG25-11

Economic & Environmental Policy

True or False Questions

1. Rarely do interest groups work in consultation with federal bureaucrats that are most directly affected by public policy for fear of being accused of influence peddling. True or False

2. The United States relies more heavily on free-market mechanisms to make its production decisions, but not distribution, and consumption ones. True or False

3. Price fixing was prevalent in the United States in the late nineteenth century when large trusts came to dominate many areas of the economy. True or False

4. The result of overregulation is higher-priced goods that are more expensive for consumers and less competitive in the domestic and global markets. True or False

5. In 2010, Congress enacted the most substantial regulation of financial institutions since the New Deal, designed to curb some of the abuses that contributed to the financial crisis. True or False

6. An example of the failure of excess government regulation was the rule eliminating lead in paint and gasoline. True or False

7. Most of the regulatory agencies established during the third wave have a much more restrictive policy mandate than those created earlier. True or False

8. Business lobbies face much less competition when it comes to the older regulatory agencies of the federal government. True or False

9. The president cannot remove the members of older agencies that are run by commissions even though the chief executive may have originally nominated them. True or False

10. The federal government sells permits to mining firms, timber companies, and ranchers that give the latter the right to take or exploit resources. True or False

11. Unlike President Obama, President Bush had steadfastly opposed drilling for oil in the Alaska Arctic National Wildlife Refuge. True or False

12. According to Patterson, climate change is a myth created by extremist environmentalists as a means to generate revenue for their movement. True or False

13. The United States lags behind most Western countries, including Germany, France, and Great Britain, in reducing its greenhouse gas emissions. True or False

14. A few decades ago, the revenue from corporate income taxes was roughly the same as the revenue from individual income taxes. Today, individual taxpayers carry a substantially heavier burden. True or False

Multiple Choice Questions

1. At the height of the Great Depression of the 1930s, what was the level of unemployment?

a) 12%, b) 19%, c) 25%, d) 35%.

2. What is public policy? a) an action by financial institutions to direct government activity, b) a decision by government to follow a course of action designed to produce a particular result, c) the ability and the power to direct major institutions by either the government or the private sector, d) the evolution of the bureaucracy to compel wavering sectors of the economy to accept outside interference.

3. The U. S. government imposes restraints on business activity for the purpose of promoting economic efficiency and equity: a) fiscal policy, b) regulatory policy, c) educational policy, d) environmental policy.

4. The tax and spend side of government is referred to as: a) federal policy, b) monetary policy, c) fiscal policy, d) regulatory policy.

5. The following seeks to maintain a level of inflation consistent with sustained, controllable economic growth through its money supply decisions: a) The Department of Homeland Security, b) The Securities and Exchange Commission, c) The Commerce Department, d) The Federal Reserve Board.

6. In the Wealth of Nations (1776), Adam Smith presented the case, which holds that private individuals and firms should be allowed to make their own production and distribution decisions: a) public enterprise, b) the welfare state, c) laissez-faire doctrine, d) liberty.

7. Adam Smith argued that the desire for profit guides the economic system toward the greatest welfare for all: a) demand for goods, b) entrepreneurial talent, c) free enterprise, d) the invisible hand.

8. What areas of the economy did Adam Smith say needed to be regulated or run by government? a) natural monopolies, b) industries, c) agriculture, d) small businesses.

9. An economy that is predominantly private but also assigns a substantial role to government: a) free enterprise, b) corporatist economy, c) command economy, d) mixed economy.

10. The following refers to the relationship of inputs (the labor and material that go into making a product or service) to outputs (the product or service itself): a) equity, b) efficiency, c) per capita, d) diminishing returns.

11. Where is the optimal place to achieve efficiency for classical economists? a) the free market, b) the government through its regulatory agencies, c) a combination of both the free market and government agencies, d) among management and not the lower level workforce.

12. What is flawed about the assumption that the market always determines the price? a) The profit motive forces producers to use as few resources as possible, resulting in shoddy goods, b) If a producer can acquire a monopoly or can successfully conspire with other producers to fix the price of the product, then efficiency is lost, c) Prices are a reflection of collusion throughout the market that only government regulation can contain, d) Competition is a consequence of the character and values of society, necessary ingredients for honesty.

13. Congress took the first step toward regulating railroad price-gauging by enacting the following legislation in 1887: a) the Mann-Elkins Act, b) the Sherman Antitrust Act, c) the Interstate Commerce Act, d) the Clayton Act.

14. Why did the Federal Trade Commission block the merger between Office Depot and Staples? a) corruption practices by one of the parties was discovered, b) to maintain competition in its areas of the market, c) Staples failed to submit an environmental impact statement, d) Office Depot had earlier filed for bankruptcy.

15. The federal government tolerates business concentration, even permitting the merger of competing firms because: a) capital costs are low in key sectors, b) such firms have friendly relations with members of Congress, c) government officials realize that market competition is no longer limited to domestic competition, d) government officials realize that collusion of prices maybe a healthy condition for the market.

16. The unpaid costs of production to society, such as a local chemical plant releasing toxic wastes in a local river: a) contagion, b) production inequality, c) societal losses, d) externalities.

17. The passage of the Airlines Deregulation Act in 1977 resulted in: a) air fares declining in price and there was more competition between airlines on most routes, b) air fares going up as a result of less competition and airlines refusing to fly many routes as a result of collusion, c) air fares being stabilized after a downward trend, preventing smaller carriers from going under, d) the airlines successfully fighting the legislation, having it rescinded after a short period.

18. The crisis in America’s financial system demonstrates that: a) Too little government regulation results in greater efficiencies, b) Too much government regulation eliminates waste, c) Either too little or too much regulation can result in economic inefficiency requiring the need to find the proper balance, d) In the final analysis, the government has no business regulating the economy or its businesses because it’s unconstitutional.

19. The following occurs when an economic transaction is fair to each party, focusing on outcomes: a) economies of scale, b) efficiency, c) supply and demand, d) equity.

20. The government agency which serves to protect consumers from unsafe products: a) the Product Liability Commission, b) the Consumer Product Safety Commission, c) the Product Protection Regulatory Commission, d) the Commission on Product Safety.

21. The modern environmental movement gained impetus with the publication of Rachel Carson's, The Silent Spring," which: a) discussed the serious problems of deforestation, b) criticized the overutilization of the oceans, c) revealed the threat of harmful pesticides such as DDT, d) identified the links between processed foods and cancer.

22. The national parks are run by the National Park Service, an agency within the: a) Department of Interior, b) The U.S. Forest Service, c) The Agriculture Department, d) The Environmental Protection Agency.

23. The nation’s parks and forests are subject to the following policy: a) natural extraction, b) environmental protection, c) dual use, d) economic preservation.

24. In a 2001 decision, the Supreme Court ruled unanimously that the EPA is to: a) consider only public health and not industry costs in setting air quality standards, b) consider both public health and industry costs in air quality standards, c) consider both the economic impact and the health impact of air quality standards, d) apply cost-benefit analysis when considering air-quality standards.

25. According to EPA figures, about how many of the most dangerous toxic waste sites are still contaminated today? a) about one-tenth, b) about one-third, c) about one-half, d) about two-thirds.

26. The scientific community has concluded that carbon emissions are trapping heat in the atmosphere that is producing a gradual rise in the earth's atmosphere: a) Heat Depletion Biosphere, b) Greenhouse Effect, c) Coercive Carbon Retardation, d) Atmospheric Heat Deterioration.

27. In late 2009 at the United Nations Climate Change Conference passed a last-minute accord that would require carbon based emissions to be lowered by 50 percent over a period of: a) 5 years, b) 2 decades, c) 4 decades, d) 6 decades.

28. The United States is the world’s single largest source of carbon-fuel emissions on a per-capita basis, emitting about what percent of the world’s total? a) 10 percent, b) 15 percent, c) 20 percent, d) 25 percent.

29. The government's approach to labor developed by the courts in the early 19th century: a) Collective action by labor was to be protected based on the First Amendment's right of assembly, b) Union activity was regarded as interference with the natural supply of labor and the free setting of wages, c) Unionized labor was a natural growth of industrial development, d) Federal troops were sent in to protect the workers from goon squads hired by industry to break strikes.

30. Government programs today provide billions of dollars of assistance annually to farmers, small and large, accounting for about what amount of net agricultural income? a) more than a fourth, b) more than a fifth, c) more than a sixth, d) more than an eighth.

Fill-in Questions

1. What was the response to the 1929-1931 drop in stock prices that made matters worse?

a) Businesses cut back ___________,

b) investors fled the ______ _______,

c) depositors withdrew their bank ________, and

d) consumers slowed their _________.

2. What was the result of deregulation of the subprime mortgage market?

a) Mortgage firms lured marginally qualified homebuyers by offering low

_________ ______ and ______ _____ payments.

b) When the economy _________, many homeowners __________ on their mortgages.

c) The resulting financial crisis required a government ________ of ________ and investment firms.

3. The following agencies were created as a result of a need to regulate key sectors of the economy:

a) This agency was created in 1907 because unsafe food and drugs were being widely marketed. Its role was to clean up the problem: The _____ ____ _____ _______________.

b) This legislation was designed in part to protect investors from dishonest or imprudent stock and bond brokers: The ___________ ____ _________ ____ of 1934.

c) This legislation required employers to pay workers a minimum wage and placed limits on the use of child labor: The _____ __________ ____ of 1938.

4. Why is the problem of effectively addressing global warming such a difficult challenge?

a) Global warming can be retarded only by controlling _______-______ emissions,

b) which can be accomplished only through the implementation of _______ measures.

c) The issue is complicated further by the fact that no single _______ can solve the problem on its own.

d) The problem is also compounded by the rapid expansion of the economies of ______, India, and other developing nations.

5. The National Labor Relations Act of 1935:

a) guaranteed workers the right to ________ _____________,

b) prohibited _________ from ___________ union activities or

c) ______________ against union employees.

Answers

True or False Questions

1. False

3. True

5. True

7. False

9. True

11. False

13. True

Multiple Choice Questions

1. c

3. b

5. d

7. d

9. d

11. a

13. c

15. c

17. a

19. d

21. c

23. c

25. b

27. c

29. b

Fill-in Questions

1. a) production, b) stock market, c) savings, d) spending

3. a) Food and Drug Administration, b) Securities and Exchange Act, c) Fair Standards Act

5. a) bargain collectively, b) businesses, disrupting, c) discriminating

A:AG25-11

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