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1. How best to protect our environment and what the speed limit should be on interstate highways are both
a. foreign policy questions.
b. domestic policy questions.
c. insoluble questions.
d. local questions.
e. questions for the courts.
2. Domestic policy is best defined as
a. policies that affect major economic variables.
b. all policies that affect housing.
c. all the laws, government planning, and government action that concern internal issues of national importance.
d. matters relating to law enforcement.
e. the activities of the government concerning relations with foreign countries.
3. Regulatory policy
a. seeks to define what is and is not legal.
b. seeks to make income more evenly distributed across socioeconomic classes.
c. tries to promote the best interests of various groups over others.
d. attempts to maintain the status quo between different countries.
e. is created by cooperation between Democrats and Republicans.
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Chapter_13_Domestic_and_Economic_Policy
4. ______ policy transfers income from certain individuals or groups to others.
a. Regulatory
b. Redistributive
c. Promotional
d. Foreign
e. Bipartisan
5. ______ policy seeks to foster or discourage various economic or social activities, typically through subsidies or tax
breaks.
a. Regulatory
b. Redistributive
c. Promotional
d. Foreign
e. Bipartisan
6. From which of the following sources do American policymakers get a great deal of their information?
a. Academia
b. Local leaders
c. Family
d. Close associates
e. The media
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7. Which of the following is NOT a step in the policymaking process?
a. Policy implementation
b. Judicial review
c. Policy formulation
d. Agenda building
e. Policy evaluation
8. The Patient Protection and Affordable Care Act was
a. passed in the House but died in the Senate.
b. vetoed by President Obama, but the veto was overridden by Congress.
c. signed into law by President Reagan.
d. signed into law by President Bush.
e. signed into law by President Obama.
9. Which of the following statements best defines agenda building?
a. Making Congress aware that a problem requires congressional action
b. When government officials and the people discuss a proposal
c. When a specific proposal is discussed
d. When policymaking is implemented by bureaucrats, the courts, police, and individual citizens
e. When action is taken by Presidential officials when Congress passes a law
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10. Measured by percentage of GDP devoted to health care, the United States spends
a. less than it did in 1965.
b. about as much as Japan.
c. about as much as Britain.
d. almost twice as much as Britain or Japan.
e. more than all other countries combined.
11. As of 2010, about 50 percent of total health-care spending was paid for by
a. the government.
b. private insurance.
c. individuals.
d. charity.
e. the Health Care for Americans endowment.
12. The Medicare program is
a. the government health care program set up primarily for the poor.
b. the most costly domestic spending program.
c. the government health care program set up primarily for children.
d. the second largest domestic spending program.
e. part of New Deal legislation introduced by Franklin Roosevelt in the 1930s.
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13. Which of the following statements about the Medicare system is false?
a. It pays for hospital and physician bills for U.S. residents aged 65 years or over.
b. Itpayspartofelderlypeople’sprescriptiondrugbenefits.
c. Some health-care providers have become reluctant to accept Medicare patients, because the Federal
Government has cut back on reimbursement rates.
d. Reimbursement rates and caps are set according to international standards.
e. It is funded by taxes on wages and salaries.
14. The Medicaid program is funded
a. in equal shares by every state.
b. by a tax on private insurance companies.
c. by a combination of state and federal taxpayers.
d. exclusively by the federal government.
e. exclusively by state governments.
15. Throughout the twentieth century, most economically advanced nations adopted ______ systems.
a. self-pay health-care
b. Medicaid
c. Medicare
d. employer-sponsored health insurance
e. universal health insurance
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16. Policy formulation is
a. the process of making the government aware that an issue requires action.
b. the discussion of proposals between governmental officials and the public.
c. choosing a specific policy proposal from among the alternatives that have been discussed.
d. concerned with the implementation of policy by bureaucrats, the courts, police, and individual citizens.
e. the process of examining how a policy has worked in practice.
17. During his first two years in office, President ______ attempted to steer a national health-insurance proposal
through Congress, but his plan failed.
a. Jimmy Carter
b. Franklin D. Roosevelt
c. Ronald Reagan
d. Barack Obama
e. Bill Clinton
18. The part of the policymaking process that involves choosing a specific policy from among the proposals that have
been discussed is known as policy _____.
a. formulation
b. implementation
c. adoption
d. choices
e. consultation
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19. In health-care reform, the requirement that all citizens obtain health-care insurance coverage from some source,
public or private, is called a(n)
a. mixed system.
b. dual mandate.
c. federal monopoly.
d. single-payer system.
e. individual mandate.
20. All of the following statements about the new health-care legislation are true EXCEPT
a. excluding people with preexisting conditions from insurance plans is banned.
b. Medicaid coverage is guaranteed for individuals making up to $250,000 a year.
c. health insurance companies pay a new tax.
d. employers that do not offer health insurance coverage are taxed.
e. state health-insurance exchanges will be created where individuals and small businesses can buy insurance.
21. Policy implementation is
a. concerned with how policies are carried out by bureaucrats, the courts, police, and individual citizens.
b. the process of making the media aware of an issue.
c. the discussion of proposals between governmental officials and the public.
d. concerned with a specific strategy for a proposal.
e. a study conducted to see what happens after a policy is first established.
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22. Which of the following statements is true of policy evaluation?
a. After a policy has been implemented, it is often challenged in the Supreme Court.
b. Policy evaluation is just an academic exercise and has no real-world consequences.
c. Groups inside and outside government conduct studies to determine how the program actually works after a
policy has been in place for a period of time.
d. By 2013, the health-care reforms had been thoroughly evaluated.
e. After a period of evaluation, the president implements and executes the law.
23. Which of the following statements about immigration rates in the United States is true?
a. Immigration rates are at their lowest since the 1950s.
b. Immigration rates are falling dramatically.
c. Immigration rates are stable since they peaked in the 1980s.
d. Immigration rates are among the highest since their peak in the early twentieth century.
e. Immigration rates are lower than ever before.
24. Those who were born on foreign soil now constitute about ______ of the U.S. population.
a. 1.5 percent
b. 6 percent
c. 13 percent
d. 23 percent
e. 46 percent
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25. Since 1977, four out of five immigrants to the United States come from
a. Latin America or Europe.
b. Asia or Africa.
c. Latin America or Asia.
d. Europe or Asia.
e. Africa or Latin America.
26. The number of unauthorized immigrants in the United States is estimated to be around
a. 50,000.
b. 3 million.
c. 90 million.
d. 11 million.
e. 150 million.
27. Critics of immigration fear that immigrants to the United States may
a. take jobs away from American workers.
b. offset the low birthrate and aging population.
c. expand the workforce and help support, through their taxes, government programs such as Medicare.
d. become Americanized.
e. pay into the Social Security program.
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28. During his campaign, Barack Obama supported reforms that would
a. automatically grant citizenship to all illegal immigrants currently in the United States.
b. give illegal immigrants a path toward citizenship.
c. eliminate crackdowns on employers who hire illegal immigrants.
d. automatically send all illegal immigrants currently in the United States back to their home countries.
e. closetheU.S.–Mexicoborder.
29. WhichofthefollowingstatementsaboutArizona’s2010immigrationlawisfalse?
a. Other states made tougher immigration laws soon afterward.
b. Opponents of the law claimed the act would lead to harassment of Latinos.
c. It required police to stop and question anyone suspected of being in the country illegally.
d. It criminalized the failure to carry immigration documents.
e. The decision that the Supreme Court made about it left the door open for future challenges to the law based
on equal protection principles.
30. Of all the petroleum the United States consumes, how much is imported?
a. One-half
b. Three-fourths
c. Three-fifths
d. Nine-tenths
e. One-fifth
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31. About 13 percent of all U.S. oil imports come from
a. Venezuela and Iran.
b. Argentina.
c. Canada and Mexico.
d. Russia.
e. Brazil.
32. With regard to the issue of oil and energy,
a. President Obama has not been active in supporting new policies.
b. theworld’slargestoilexportersareallfriendsoftheUnitedStates.
c. President Obama opposes using nuclear power.
d. inrecentyears,thepracticeoffrackingstandstoreduceAmerica’sdependenceonforeignoil.
e. the government mandated a requirement that cars and trucks to have a maximum rate of 100 miles per gallon
by 2016.
33. What has resulted from the 2010 BP Deepwater Horizon oil spill disaster?
a. The Environmental Protection Agency announced it would no longer inspect oil facilities.
b. Senate Democrats championed legislation promoting the expansion of new drilling sites.
c. House Republicans introduced legislation promoting a variety of new green-energy initiatives.
d. A temporary moratorium on new offshore drilling was instituted.
e. Foreign oil imports were banned.
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34. In the 1990s, scientists working on climate change began to conclude that gases released by human activity,
principally CO2, are producing
a. a“greenhouseeffect.”
b. acid rain.
c. “ElNiño.”
d. a“heatindexeffect.”
e. methane poisoning.
35. ______scientistswhoperformresearchontheworld’sclimatebelievethatglobalwarmingwillbesignificant.
a. Virtually, none of the
b. A minority of
c. About half of all
d. A slight majority of
e. Almost all
36. Which of the following statements concerning attitudes toward global warming is true?
a. A majority of Republicans believe that global warming does not exist.
b. A majority of Democrats believe that global warming is a myth.
c. Disblief of global warming among Democrats rose by 11 percentage points between 2001 and 2002.
d. Disblief of about global warming among Republicans fell by 11 percentage points between 2001 and 2002.
e. Republican opinion about global warming has not changed in recent years.
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37. An economic downturn, usually characterized by a fall in the GDP and rising unemployment, is called
a. a Keynesian economy.
b. “hiddenunemployment.”
c. inflation.
d. a depression.
e. a recession.
38. A sustained rise in the general price level of goods and services is called
a. a Keynesian economy.
b. “hiddenunemployment.”
c. inflation.
d. a depression.
e. a recession.
39. Which of the following statements best defines discouraged workers?
a. People who work in businesses that they created
b. People who took control of businesses from someone else
c. People who work less than forty hours a week
d. People who are ineligible to work in the United States
e. People who have dropped out of the labor force and are no longer looking for a job
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40. Which of the following statements regarding the economy is true?
a. Rising prices are referred to as deflation.
b. An extremely severe recession is called a depression.
c. The United States has not experienced a recession since 1933.
d. Ineffect,today’sdollaristhesameasa1910dollar.
e. The inflation rate is an indicator of average interest rates.
41. Keynesian economics advocates
a. government control of markets.
b. elimination of all national debt.
c. the use of government spending and taxing to help stabilize the economy.
d. acceptance of the theories of Adam Smith.
e. laissez-faire economics.
42. Which of the following best defines deficit spending?
a. When the government receives more than it spends.
b. When the government spends more than it receives
c. When the government controls the amount of money in the economy
d. When the government buys Treasury securities
e. When the government decreases marginal tax rates
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43. Which of the following statements regarding the federal budget is true?
a. The federal government has spent more than it has received every year since it began.
b. The federal budget deficit amounts to almost nothing.
c. The United States had a budget surplus each year from 1998 to 2002.
d. The budget deficit peaked during World War II and has continued to decrease since then.
e. ThefederalbudgetdeficitwashelpedbyPresidentBush’staxcuts.
44. Monetary policy includes
a. using changes in the amount of money in circulation to alter credit markets, employment, and the rate of
inflation.
b. using changes in the size of the federal budget deficit to alter national economic variables.
c. regulating tax rates to ensure controlled growth and low inflation.
d. continually increasing the size of the national debt.
e. linkage of the consumer price index and the gross national product.
45. When the economy is faced with inflation, according to monetary policy, what should the government do?
a. It should follow a loose monetary policy.
b. It should raise taxes.
c. It should follow a tight monetary policy.
d. It should lower taxes.
e. It should take total control of the economy.
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46. The responsibility of the Federal Open Market Committee is to
a. seek a balanced trade policy.
b. negotiate with Congress in developing a budget.
c. decide how monetary policy should be carried out.
d. develop a rational trade policy through the United Nations Trade Information Commission.
e. regulate the markets for stocks and bonds.
47. The value of all taxes collected by the various levels of government in the United States is
a. overhalfofthenation’sincome.
b. higher than what most other countries collect.
c. subject to a ceiling imposed by Congress.
d. about 28 percent of the gross domestic product.
e. inevitably enough to run the government and still have a budget surplus.
48. What do tax loopholes allow individuals and corporations to do?
a. They allow them to reduce their tax liabilities legally.
b. They choose the state where they pay taxes.
c. They complain to the IRS.
d. They only pay taxes on investment income.
e. They commit crimes without getting tried.
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49. Which of the following happens with a progressive tax system?
a. All taxpayers pay taxes at the same percentage rate.
b. People with higher incomes pay taxes at a higher rate.
c. People with higher incomes pay taxes at a lower rate.
d. The tax burden consists mostly of property and sales taxes.
e. The tax rates increase by a set percentage every year.
50. The Social Security payroll tax can best be described as a
a. state tax.
b. victimless tax.
c. excise tax.
d. regressive tax.
e. progressive tax.
51. Describe each stage of the policymaking process. Are there any reforms that could be implemented to make it more
responsive to the American people? If so, what are they? If not, why not?
52. Describehealthcare’sroleintheAmericaneconomy,includingrecenttrendsincoverageandcosts.
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53. Examine the health-care reform legislation that was passed by Congress in 2010. Explain the political process that
led to its passage.
54. What advantages and disadvantages exist for a nation that has a large immigrant population?
55. Describe recent efforts aimed at reducing American dependence on foreign oil.
56. Examine the federal budget deficit, why it occurred, and what measures should be taken to bring it down.
57. Examine the idea of the government guaranteeing every adult a job. What problems may there be? What other kinds
of policies can help combat unemployment?
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58. Could the Obama Administration be said to have carried out true Keynesian economic policy? Why or why not?
59. Explain the difference between loose and tight monetary policy, and describe when they would be appropriate policy
options.
60. Explain the difference between progressive and regressive taxes. Would we be better served by simply employing a
flat tax across the board? Why or why not?
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