1. The level of government regulation of business has always been low.
a. True
b. False
2. Regulating the way business operates is only one of several roles the government has in its relationship with business.
a. True
b. False
3. Our goals for business focus solely on the production and distribution of goods and services.
a. True
b. False
4. The relationship between government and business has become adversarial, but is improving.
a. True
b. False
5. The relationship between government and business is limited to government’s influence over business.
a. True
b. False
6. Proponents of privatization want government to be a producer of services.
a. True
b. False
7. Advocates of privatization base their positions on the need for efficiency and overall performance.
a. True
b. False
8. One of the most direct ways in which government influences business is through transfer payments.
a. True
b. False
9. When providing loan guarantees for business, the government actually transfers the money to the business.
a. True
b. False
10. The monetary policy set the Federal Reserve System is completely independent of the influence of other branches of
government.
a. True
b. False
11. In many ways the most controversial aspect of the government/business relationship is regulation.
a. True
b. False
12. Government regulation generally arises out of some type of market failure.
a. True
b. False
13. Many government regulations over business have been created by the efforts of special interest groups.
a. True
b. False
14. Negative externalities are the additional costs incurred by business due to the outside regulations placed by
government.
a. True
b. False
15. Keeping people informed is an important social goal of government.
a. True
b. False
16. Early economic regulations and the government bodies that administered them were usually formed along industry
lines.
a. True
b. False
17. The new social regulation focuses on business’s impacts on other businesses.
a. True
b. False
18. Newer social regulations covers business practices in all industries.
a. True
b. False
19. Deregulation has provided uniform benefits for all parties affected.
a. True
b. False
20. One of the recurring problems in industries that have been deregulated is that they tend to become dominated by a few
firms.
a. True
b. False
21. Government intervention in business began with
a. opening of settlements.
b. a push for tariffs.
c. governments giving of land grants.
d. the creation of the Interstate Commerce Commission.
22. The reason that the United States government passed anti-trust legislation was
a. to conform to Adam Smith’s economic theory from Wealth of Nations.
b. due to lobbying efforts by private citizens’ groups.
c. due to the anti-competitive practices of some large trusts.
d. to restrict competition.
23. Government’s new role in its relationship with business during the New Deal era was one of
a. partner.
b. servant.
c. master.
d. restoring prosperity and promoting economic growth.
24. Most Congressional legislation before the 1950s that affected business was
a. economic in nature.
b. social regulation.
c. aimed at protecting individuals’ rights.
d. to protect consumers’ privacy.
25. After the 1950s, most Congressional legislation that affected business was
a. economic in nature.
b. concerned largely with the quality of life.
c. supportive of business.
d. aimed at promoting competition.
26. Modern goals for business include all of the following except
a. safe working environments.
b. fair pay.
c. promoting the social welfare.
d. equal employment opportunities.
27. The clash of ethical systems between government and business is centered around
a. growth and sustainability.
b. economic goals and social welfare.
c. individualist and collectivist ethics.
d. privatization and federalization.
28. Business generally follows the ethic of
a. deontology.
b. collectivism.
c. individualism.
d. socialism.
29. Government is generally thought to follow the ethic of
a. deontology.
b. collectivism.
c. individualism.
d. socialism.
30. When it comes to the government business relationship, the public thinks:
a. the government is doing too much.
b. the government is doing too little.
c. the government needs to adapt to new realities.
d. All of these.
31. Which of the following is not a method that government uses to influence business?
a. lobbying
b. taxation
c. regulation
d. industrial policy
32. The public and government use all of the following methods of influencing each other except
a. politicking.
b. voting.
c. forming special-interest groups.
d. coercion.
33. Every form of state intervention that affects industry as a distinct part of the economy is called
a. internationalization.
b. globalization.
c. industrial policy.
d. privatization.
34. The question of whether current public functions should be performed by the government or private sector is
addressed by
a. industrial policy.
b. privatization.
c. central planning.
d. moral suasion.
35. Arguments for industrial policy include all of the following except
a. for economic reform.
b. making government more efficient.
c. making government more effective.
d. stifling innovation.
36. Arguments against industrial policy include all of the following except
a. reduces market efficiency
b. The need to rescue “sunset” industries.
c. the need to promote “sunrise” industries.
d. foreign industrial policy success has been variable.
37. A strong industrial policy:
a. is present in most developing countries.
b. is a term heard continuously.
c. is government intervention.
d. helps firms compete in a fast-moving global economy.
38. Industrial policy is:
a. by default.
b. a powerful nonregulating approach by government to influence business.
c. non debatable.
d. consistent in each government administration.
39. There has always been a strong reaction in the United States to any form of industrial policy because:
a. It reduces the market’s efficiency.
b. It conflicts with the widely held view of government’s role in the economy.
c. Existing attempts to form industrial policies have generally been irrational and uncoordinated.
d. Industrial policies violate anti-trust legislation.
40. The opposite of privatization could be considered
a. creeping expropriation.
b. industrial policy.
c. subsidization.
d. federalization.
41. Government influences business through all of the following nonregulatory methods except
a. being a major employer.
b. being a standard setter.
c. requiring equal employment opportunities be granted to job applicants.
d. providing transfer payments.
42. Government payments to industries or groups with special qualifications are called
a. transfer payments.
b. subsidies.
c. loan guarantees.
d. moral suasion.
43. Government attempts to persuade business to act in the public interest are called
a. monetary policies.
b. moral suasion.
c. standard setting.
d. transfer payments.
44. All of the following are reasons that government regulation of business is needed except
a. to ensure that customers and employees are treated fairly.
b. maintain competitive markets.
c. to protect the environment.
d. to ensure that customers and employees are not exposed to unreasonable hazards.
45. Government regulations have been criticized for all the following reasons except
a. being too extensive.
b. being too costly.
c. being burdensome to business.
d. being ineffective.
46. The act of governing or bringing under the control of law or constituted authority is called
a. regulation.
b. despotism.
c. central planning.
d. dictatorship.