14 Economic Policy Making

01

Which of the following terms is defined as an economic downturn characterized by rising unemployment?

Inflation

Recession

Monetary policy

Regressive taxation
02

A government program pays money to firms that produce electricity from renewable energy sources. The program is an example of which of the following?

Tax credit

Earmark

Entitlement

Subsidy
03

Congress increases taxes on families earning more than $250,000 a year and uses the money to fund healthcare for middle- and lower-income families. Which of the following terms best describes the action of Congress?

Income redistribution

Inflation

Subsidy

Fiscal policy
04

A decline in the value of the currency is known as which of the following?

Income redistribution

Inflation

Subsidy

Monetary policy
05

Which of the following is the most important tax source for the federal government?

Corporate income taxes

Excise taxes

Individual income taxes

Payroll taxes
06

An individual earning $150,000 a year gives $5,000 to her alma mater on the tenth anniversary of her graduation. How does that tax deductible donation affect her taxable income?

It reduces it by $5,000.

It increases it by $5,000.

It does not affect it.

It depends on her tax bracket.
07

Payroll taxes fund which of the following federal programs?

Medicaid

No Child Left Behind

Social Security

All of the above
08

The personal income tax assesses a higher tax rate on higher incomes. It is an example of which of the following types of taxes?

Regressive tax

Proportional tax

Flat tax

Progressive tax
09

An advocate of the ability-to-pay theory of taxation would favor which of the following types of taxes?

Progressive tax

Proportional tax

Flat tax

Regressive tax
10

Supply-side economics is most closely associated with which of the following concepts?

Progressive taxation to make the system more fair

Balancing the federal budget to promote economic growth

Cutting taxes to promote economic growth and thus increased tax revenues

All of the above
11

Assume that federal government revenues are $2 trillion and that federal expenditures are $2.2 trillion. Which of the following statements about the budget picture is accurate?

The budget is balanced.

The budget is in deficit by $0.2 trillion.

The budget is in surplus by $0.2 trillion.

The budget is in deficit by $2 trillion.
12

Which of the following is not one of the four largest categories of federal government expenditures?

Foreign aid

Healthcare

Social Security

Defense
13

Which of the following programs targets primarily low income, blind, and disabled recipients?

Social Security

Medicare

Medicaid

All of the above
14

Which of the following is NOT an example of a welfare program?

Food Stamps

Medicare

SSI

TANF
15

Welfare reform has accomplished which of the following goals?

Eliminated poverty

Moved most former welfare recipients into the middle class

Reduced the number of people receiving welfare benefits

All of the above
16

Under the law, individuals who meet certain requirements (such as age or income level) qualify to receive benefits under a particular federal program. The program is an example of which of the following?

Subsidy

Progressive tax

Discretionary spending

Entitlement
17

What is the goal of PAYGO?

To reduce the federal budget deficit

To move welfare recipients into the workforce

To promote economic development

To make the tax system more progressive
18

Which of the following is most closely associated with monetary policymaking?

House Appropriations Committee

President

Federal Reserve Board

U.S. Supreme Court
19

The Federal Open Market Committee (FOMC) is most closely associated with which of the following?

Fiscal policymaking

Monetary policymaking

Pork-barrel spending

Entitlement reform
20

A recent appropriation bill included money to construct a science building at the university. The provision was an example of which of the following?

Subsidy

Earmark

Discretionary spending

Inflation

14 Economic Policy Making

Which of the following terms is defined as an economic downturn characterized by rising unemployment?

A government program pays money to firms that produce electricity from renewable energy sources. The program is an example of which of the following?

Congress increases taxes on families earning more than $250,000 a year and uses the money to fund healthcare for middle- and lower-income families. Which of the following terms best describes the action of Congress?

A decline in the value of the currency is known as which of the following?

Which of the following is the most important tax source for the federal government?

An individual earning $150,000 a year gives $5,000 to her alma mater on the tenth anniversary of her graduation. How does that tax deductible donation affect her taxable income?

Payroll taxes fund which of the following federal programs?

The personal income tax assesses a higher tax rate on higher incomes. It is an example of which of the following types of taxes?

An advocate of the ability-to-pay theory of taxation would favor which of the following types of taxes?

Supply-side economics is most closely associated with which of the following concepts?

Assume that federal government revenues are $2 trillion and that federal expenditures are $2.2 trillion. Which of the following statements about the budget picture is accurate?

Which of the following is not one of the four largest categories of federal government expenditures?

Which of the following programs targets primarily low income, blind, and disabled recipients?

Which of the following is NOT an example of a welfare program?

Welfare reform has accomplished which of the following goals?

Under the law, individuals who meet certain requirements (such as age or income level) qualify to receive benefits under a particular federal program. The program is an example of which of the following?

What is the goal of PAYGO?

Which of the following is most closely associated with monetary policymaking?

The Federal Open Market Committee (FOMC) is most closely associated with which of the following?

A recent appropriation bill included money to construct a science building at the university. The provision was an example of which of the following?