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 goverrnnent and business is limited to government’s influence over business.
a. True
b.
False
6. Proponents of privatization want goverrnnent 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 goverrnnent 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
goverrnnent.
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
goverrunent.
a. True
b.
False
15. Keeping people informed is an important social goal of goverrunent.
a. True
b.
False
16. Early economic regulations and the goverrnnent 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
finns.
a. True
b.
False
21. Government intervention in business began with
a. opening of
settlements.
b. a push for
tariffs.
c. governments giving
ofland 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
oflife.
c. supportive of business.
d. aimed at promoting competition.
26. Modem 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. Which of the following is not mentioned as a frustration executives have with government officials, according to a
recent McKinsey
survey?
a. Concerns that regulators do not understand the economics of their
industry
b. Concerned that government often blames business for society’s
problems
c. Difficulty in determining the best way to work with
government
d. Concerned that government aims to redistribute the balance of
wealth
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 goverrunent 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 goverrnnent 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 goverrnnent 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 goverrnnent intervention.
d. helps frrms compete in a fast-moving global
economy.
38. Industrial policy is:
a. by default.
b. a powerful nonregulating approach by goverrunent to influence business.
c. non
debatable.
d. consistent in each goverrunent 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 goverrnnent’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. Goverrnnent 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 envirornnent.
d. to ensure that customers and employees are not exposed to unreasonable
hazards.
45. Goverrnnent 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.