Economic Policy

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| By Mr.sideburns
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Mr.sideburns
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Policy Quizzes & Trivia

This quiz deals with economic policy.


Questions and Answers
  • 1. 

    Traditionally, the Republican has been viewed as favoring which of the following groups?

    • A.

      Big business

    • B.

      The poor

    • C.

      The middle class

    • D.

      African-Americans

    • E.

      Hispanics

    Correct Answer
    A. Big business
    Explanation
    The Republican party has traditionally been associated with favoring big business. This is because Republicans tend to support policies that promote free-market capitalism and limited government intervention in the economy. They often advocate for lower taxes, deregulation, and pro-business policies that are seen as beneficial to large corporations and wealthy individuals. This alignment with big business has been a defining characteristic of the Republican party for many years.

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  • 2. 

    Traditionally, the Democratic Party has been known as

    • A.

      Supporters of a tax -and-spend philiosophy.

    • B.

      Supply siders.

    • C.

      Believers of a trickle-down economics.

    • D.

      Advocates of antiregulation of the economy.

    • E.

      Proponents of repeal of capital gains taxes.

    Correct Answer
    A. Supporters of a tax -and-spend philiosophy.
    Explanation
    The Democratic Party has traditionally been associated with a tax-and-spend philosophy. This means that they support higher taxes in order to fund government programs and initiatives. They believe in using government resources to invest in areas such as healthcare, education, and infrastructure. This approach is often criticized by conservatives who argue that it leads to excessive government spending and a larger role for the government in the economy.

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  • 3. 

    All of the following items are meausres of the nation's economy EXCEPT

    • A.

      The nations unemployment rate.

    • B.

      The rise or fall of the Consumer Price Index.

    • C.

      The amount of growth or decline in the Gross National Product.

    • D.

      The amount of taxes corporations pay to the federal government.

    • E.

      The rise or fall of the Gross Domestic Product.

    Correct Answer
    D. The amount of taxes corporations pay to the federal government.
    Explanation
    The given question asks for the measure of the nation's economy that is NOT included in the list. The first three options - the nation's unemployment rate, the rise or fall of the Consumer Price Index, and the amount of growth or decline in the Gross National Product - are commonly used indicators of the state of an economy. The last option - the rise or fall of the Gross Domestic Product - is also a widely recognized measure of economic performance. However, the amount of taxes corporations pay to the federal government is not typically considered a direct measure of the nation's economy, but rather a reflection of corporate financial obligations to the government.

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  • 4. 

    Which of the following economic policies reflects imposed government economic mandates?

    • A.

      Distributive economic policy.

    • B.

      Regulatory economic policy.

    • C.

      Redistributive economic policy.

    • D.

      Supply side economic policy.

    • E.

      Stimulus programs passed by congress.

    Correct Answer
    B. Regulatory economic policy.
    Explanation
    Regulatory economic policy reflects imposed government economic mandates because it involves the creation and enforcement of rules and regulations that govern economic activities. This policy aims to ensure fair competition, protect consumers, and maintain stability in the economy. It includes measures such as licensing requirements, environmental regulations, and financial regulations, which are imposed by the government to control and direct economic behavior.

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  • 5. 

    Which of the following strategies results in government giving benefits directly to the people?

    • A.

      Distributive economic policy.

    • B.

      Regulatory economic policy.

    • C.

      Redistributive economic policy.

    • D.

      Increased government regulations.

    • E.

      Increasing the personal income tax.

    Correct Answer
    A. Distributive economic policy.
    Explanation
    A distributive economic policy involves the government providing benefits directly to the people. This can be in the form of welfare programs, subsidies, or direct cash transfers. It aims to reduce inequalities and ensure that resources are distributed more evenly among the population. Regulatory economic policy focuses on creating and enforcing rules and regulations to ensure fair competition and protect consumers. Redistributive economic policy involves taking resources from one group and giving them to another, usually through taxation and social programs. Increased government regulations and increasing personal income tax do not directly result in benefits being given to the people.

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  • 6. 

    Which of the following strategies results in government taking money from one segment of the society and giving it back to a group in need?

    • A.

      Distributive economic policy.

    • B.

      Regulatory economic policy.

    • C.

      Redistributive economic policy.

    • D.

      Increasing research and development oppurtunities for business.

    • E.

      Increasing price supports.

    Correct Answer
    C. Redistributive economic policy.
    Explanation
    A redistributive economic policy refers to a strategy where the government takes money from one segment of society and gives it back to a group in need. This policy aims to reduce income inequality by redistributing wealth and resources to those who are less fortunate or in need of assistance. It involves implementing various programs such as welfare, social security, and progressive taxation to ensure a fairer distribution of wealth and support those who are economically disadvantaged.

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  • 7. 

    A primary way that the Federal Reserve regulates the money supply is when it

    • A.

      Votes to increase taxes.

    • B.

      Votes to decrease taxes.

    • C.

      Adjusts the discount rate.

    • D.

      Adjusts the rate of inflation.

    • E.

      Votes to increase price supports.

    Correct Answer
    C. Adjusts the discount rate.
    Explanation
    The Federal Reserve regulates the money supply by adjusting the discount rate. The discount rate is the interest rate at which commercial banks can borrow from the Federal Reserve. When the Federal Reserve lowers the discount rate, it encourages banks to borrow more, which increases the money supply. Conversely, when the Federal Reserve raises the discount rate, it discourages banks from borrowing, which decreases the money supply. Therefore, adjusting the discount rate is a primary tool used by the Federal Reserve to regulate the money supply.

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  • 8. 

    Supply side economists urge

    • A.

      Government stimulation of the economy.

    • B.

      Increased government spending for social programs.

    • C.

      Increased government borrowing for money.

    • D.

      Large tax cuts by government.

    • E.

      An increase of the management of the economy by the government.

    Correct Answer
    D. Large tax cuts by government.
    Explanation
    Supply side economists believe that large tax cuts by the government are necessary to stimulate the economy. They argue that reducing taxes on individuals and businesses will incentivize them to work, invest, and produce more, which will lead to economic growth. By allowing individuals and businesses to keep more of their income, supply side economists believe that tax cuts will encourage spending and investment, which in turn will create jobs and increase overall economic activity. This approach is based on the belief that reducing tax burdens will ultimately lead to increased productivity and economic prosperity.

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  • 9. 

    Which of the following presidents pursued a laissez-faire economic policy?

    • A.

      Theodore Roosevelt.

    • B.

      Herbert Hoover.

    • C.

      Franklin Roosevelt.

    • D.

      Lyndon Johnson.

    • E.

      Bill Clinton.

    Correct Answer
    B. Herbert Hoover.
    Explanation
    Herbert Hoover pursued a laissez-faire economic policy. Laissez-faire refers to a hands-off approach by the government in economic affairs, allowing the free market to operate without much intervention. Hoover believed in limited government involvement and favored policies that promoted individual freedom and private enterprise. This approach was evident during his presidency, particularly in his response to the Great Depression, where he initially relied on voluntary cooperation and private efforts to stimulate the economy, rather than direct government intervention. However, his approach proved ineffective in addressing the economic crisis, leading to criticism of his laissez-faire policies.

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  • 10. 

    Which of the following laws was involved in response to the air traffic controller strike in 1981?

    • A.

      Fair Labor Standards Act

    • B.

      Federal Labor Standards Act

    • C.

      Wagner Act

    • D.

      Norris-La Gaurdia Act

    • E.

      Taft- Hartley Act

    Correct Answer
    E. Taft- Hartley Act
    Explanation
    The Taft-Hartley Act was involved in response to the air traffic controller strike in 1981. This act, passed in 1947, amended the National Labor Relations Act and placed restrictions on the activities and power of labor unions. It allowed the President to intervene in labor disputes that could potentially harm national health or safety, which was the case with the air traffic controller strike. As a result, President Ronald Reagan used the Taft-Hartley Act to fire over 11,000 striking air traffic controllers and banned them from federal employment for life.

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  • 11. 

    Which of the following industries had major economic problems as a result of government deregulation?

    • A.

      The airine industry.

    • B.

      The telephone company.

    • C.

      The savings and loans.

    • D.

      The railroad industry.

    • E.

      The cable television industry.

    Correct Answer
    C. The savings and loans.
    Explanation
    The savings and loans industry had major economic problems as a result of government deregulation. Deregulation in the 1980s allowed savings and loans institutions to engage in riskier lending practices and invest in speculative ventures. This led to a wave of bad loans and risky investments, ultimately causing the collapse of many savings and loans institutions and costing taxpayers billions of dollars in bailouts.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 07, 2009
    Quiz Created by
    Mr.sideburns

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