Deck 16: Economic and Social Welfare Policymaking

Question 1

To which of the following can increasing inequality in the distribution of income contribute?

A)the complacency of dependency -Consider This: Speaker of the House Paul Ryan warned of this within the context of a generous welfare net.
B)recessive economics
C)regressive politics
D)relative deprivation

Answer 1

relative deprivation

Question 2

Questions 7 and 8 refer to the following graph.
Poverty rates for persons with selected characteristics: A comparison of the official and
supplemental measures. Source: U.S.Census Bureau,"The Research Supplemental Poverty Measure: 2015," September 2016.
Based on the graph,which group has the highest poverty rate?

A)the elderly
B)Hispanics -Consider This: This is the third largest group suffering from poverty.
C)central-city residents
D)unmarried women

Answer 2

D

Question 3

Questions 3 and 4 refer to the following image. Credit: ©Andrew Singer,HYPERLINK "http://www.andysinger.com" www.andysinger.com
Which of these is most consistent with the "Liberal Economic Fantasy" in the cartoon?

A)interest rate increases by the Federal Reserve Board
B)congressional action to pay off some of its debt
C)a decision by the Federal Reserve Board to increase the money supply -Consider This: The Federal Reserve Board engages in monetary policies by setting interest rates.
D)increased spending by Congress for roads,bridges,and other infrastructure

Answer 3

D

Question 4

What is inflation?

A)the pace at which gross domestic product expands
B)the speed with which the money supply expands -Consider This: This is controlled through government's monetary policies.
C)the rate at which prices for goods and services increase
D)increasing federal taxes

Question 5

Which of the following contributes to the unpopularity of welfare programs in the United States?

A)Americans are generally uncompassionate.
B)Americans tend to think that U.S.welfare programs are not generous enough.-Consider This: Many Americans think that U.S.welfare programs are too generous.
C)Many Americans believe that access to welfare benefits contributes to the flood of immigrants.
D)Welfare programs tend to increase inflation and decrease exports.

Question 6

Which of the following is a concern about the Social Security Trust Fund?

A)The rate of Social Security payroll taxes will continue to decrease unless Congress changes the law.-Consider This: This rate has been stable for many years.
B)The number of current retirees contributing to the fund will continue to increase as the number of seniors continue to work after traditional retirement age.
C)Soon there will be too few workers contributing to the Trust Fund to support the increasing number of retirees.
D)Soon the Trust Fund will need to pay back the money it borrowed from the general treasury but it does not look like it will be able to repay this loan.

Question 7

Which of the following strategies does monetary policy dictate in inflationary periods?

A)Congress should increase spending.
B)Congress should raise taxes on citizens.
C)The Federal Reserve should lower interest rates.-Consider This: A decrease of interest rates makes the borrowing of money cheaper,thereby increasing the amount of money in the economy.
D)The Federal Reserve should raise interest rates.

Question 8

Questions 1 and 2 refer to the following graph.
Unemployment rates by age and race/ethnicity Source: Bureau of Labor Statistics.
Based on the graph,which of the following groups has the highest unemployment rate?

A)middle aged whites -Consider This: Though many people perceive unemployment as a problem primarily facing middle aged people,it disproportionately affects younger people.
B)Hispanics over the age of 50
C)people who receive Social Security checks
D)black teenagers

Question 9

Unemployment rates by age and race/ethnicity Source: Bureau of Labor Statistics.

-Which of the following might best explain the trend displayed in the graph?

A)Older people cannot maintain the pace of technological change in the workforce.-Consider This: The workplace is changing as technology becomes more prevalent,but this does not necessarily lead to unemployment of job loss.
B)The number of jobs has to increase dramatically for all new entrants to get a job.
C)Young people are less motivated to get a job than older people.
D)Middle aged people are more likely to get laid off than other groups.

Question 10

What does the consumer price index measure?

A)income distribution
B)the gross national product
C)inflation
D)money supply -Consider This: Government manages the economy by controlling the money supply.

Question 11

Questions 5 and 6 refer to the following image. Credit: Stephen Ewen via HYPERLINK "http://owsposters.tumblr.com" http://owsposters.tumblr.com
Which of the following statement does this graphic demonstrate?

A)The vast majority of wealthy people in the U.S.live in the West.
B)90% of people in the U.S.hold a proportional amount of the nation's wealth.
C)A very small percentage of people in the U.S.hold the majority of its wealth.
D)There is no difference between the top 1% of Americans and the following 9%.-Consider This: If 1% and 9% hold the same amount of "land," it is a clear indication that each person in the 1% holds a lot more than those in the 9%.

Question 12

Source: "Indicators of Welfare Dependence," U.S.Department of Health and Human Services,Annual Report to Congress,2008.Updated by the authors based on welfare caseload data reported by the U.S.Department of Health and Human Services' Administration for Children and Families,poverty statistics reported by the U.S. Census Bureau,and caseload data for food stamps as reported by the Department of Agriculture.

-Based on the graph,how did welfare reform affect the number of people receiving government assistance?

A)The proportion of impoverished people on welfare remained the same.
B)More people received welfare,but fewer received food stamps.-Consider This: The opposite is true.Many more people receive food stamps,but significantly fewer receive welfare.
C)Only those with the best chance of moving above the poverty line receive welfare.
D)The number of people on welfare declined even as poverty increased.

Question 13

What type of federal program is Medicaid?

A)discretionary
B)means-tested
C)social insurance
D)entitlement -Consider This: In contrast to entitlement programs,Medicaid provides only benefits to those who can establish a need.

Question 14

An economic theory holding that the supply of money is the key to a nation's economic health and that too much cash and credit in circulation produces inflation is called __________.

A)fiscalism
B)Keynesian -Consider This: This economic theory holds that government spending and deficits can help the economy deal with the boom and bust cycles.
C)monetarism
D)Reaganomics

Question 15

According to the Social Security Act,what is the primary source of money in the Social Security Trust Fund?

A)sales taxes
B)payroll taxes
C)property taxes -Consider This: This tax is mostly used to fund schools.
D)income taxes

Question 16

Questions 3 and 4 refer to the following image. Credit: ©Andrew Singer,HYPERLINK "http://www.andysinger.com" www.andysinger.com
Which of the following differences in economic thought does the cartoon address?

A)laissez faire v.monetarism -Consider This: Both of these theories apply to government involvement in economics and the money supply,but they don't address how to solve economic crises.
B)deflation v.inflation
C)supply side v.Keynesian
D)entitlement v.austerity

Question 17

Which of the following does Keynesian economic policy hold to be true?

A)Increasing tax rates will stimulate the economy.
B)Government spending should focus primarily on social welfare.
C)The key task for fiscal policy is to stimulate the supply of goods.-Consider This: Keynesian economic policy concerns fiscal economic policies based on government's ability to spend and tax.
D)Government should take the responsibility to stimulate the economy when it is lagging.

Question 18

Questions 11 and 12 refer to the following graph.
Parental leave policy: A Comparison Source: Rebecca Ray et al.,"Parental Leave Policies: Assessing Generosity and Gender Equality," Report of the
Center for Economic and Policy Research,June 2009,p.6.Updated by the authors.
Based on the graph,how does parental leave in the U.S.compare with other democracies?

A)The U.S.has longer unpaid leave than many other democracies.-Consider This: The majority of countries on this graph have longer paid and unpaid leave than the U.S.
B)Other democracies offer single parent families more leave than the U.S.
C)The U.S.is the only nation that does not offer paid parental leave.
D)Other democracies provide a year of paid leave to new parents.

Question 19

What federal program is designed to provide medical insurance for the very poor in the United States?

A)Medicaid
B)Medicare Part A
C)Medicare Part B
D)Obamacare -Consider This: Obamacare or the Patient Protection and Affordable Care Act was created to increase health insurance quality and affordability.

Question 20

What is one of the problems with using official poverty counts that the supplemental measure intends to address?

A)The formula is based on food costs,which have declined relative to other expenses.
B)They tend to underestimate the number of children who live in poverty.
C)They tend to exaggerate the number of women who live in poverty.
D)They tend to overestimate the amount of people in poverty.-Consider This: Due to the formula used,the number of people in poverty are underestimated.

Question 21

What would the Federal Reserve Board most likely do if it wanted to curb inflation?

A)raise interest rates
B)lower taxes -Consider This: Within the context of fiscal policy,the power to raise or lower taxes belongs to Congress.
C)increase government spending
D)increase exports

Question 22

What did the welfare reform law of 1996 implement?

A)Aid to Families with Dependent Children -Consider This: This welfare program was created by the 1935 Social Security Act.
B)disability insurance
C)Social Security for aged
D)Temporary Assistance for Needy Families

Question 23

Which of the following has been the biggest contributor to bouts of inflation over the last 50 years?

A)the inaugurations of new presidents
B)technological innovations
C)soaring prices for energy
D)wars or other significant military conflicts -Consider This: Souring prices for energy have been mostly responsible for inflation.

Question 24

Which of the following is an entitlement program?

A)food stamps
B)Medicaid -Consider This: Medicaid is a means-tested program.
C)Medicare
D)employer-provided health insurance

Question 25

Which tax is one by which the government takes a greater share of the income of the rich than of the poor?

A)progressive
B)proportional -Consider This: A tax by which the government takes the same share of income from everyone regardless of wealth.
C)regressive
D)transfer

Question 26

What is the percentage of Americans who are seeking work but unable to find it called?

A)the entitlement rate
B)the workforce rate
C)the unemployment rate
D)the underemployment rate -Consider This: This rate takes into account more than the characteristics of the unemployment rate.

Question 27

What are cash or in-kind benefits such as food stamps and low-interest college loans that are given by the government directly to individuals?

A)tax credits -Consider This: A tax incentive which allows certain taxpayers to subtract the amount of the credit from the total they owe the government.
B)tax deductions
C)tax expenditures
D)transfer payments

Question 28

According to laissez-faire economic theory,what should the government do during an economic downturn?

A)raise taxes
B)increase government spending on infrastructure projects -Consider This: Within the context of fiscal policy,the government would increase spending to stimulate the economy.
C)bail out failing industries that are at the core of our economy
D)nothing

Question 29

Which of the following most accurately describes the recent financial crisis in the United States?

A)a depression -Consider This: Concerns a sustained and long-term downturn in economic activity such as the Great Depression of the 1930s.
B)an inflationary cycle
C)a mild recession
D)a severe recession

Question 30

What would the Federal Reserve Board most likely to if it wanted to slow the rate of economic growth?

A)encourage the president to lower taxes
B)increase interest rates
C)increase the money supply -Consider This: Increasing the money supply is likely to increase inflation and ultimately overhead the economy.
D)lower capital gains rates

Question 31

Who is primarily responsible for making monetary policy in the United States?

A)Congress -Consider This: Through spending and taxation,Congress can influence fiscal policies.
B)the president
C)the Department of the Treasury
D)the Federal Reserve Board

Question 32

Which of the following entities is responsible for influencing interest rates in the United States?

A)the Congress -Consider This: Through spending and taxation,Congress and the president can shape fiscal policies.
B)the Congressional Budget Office
C)the Executive Office of the President
D)the Federal Reserve Board

Question 33

What would you generally favor if you support laissez-faire economic policies?

A)a reduction in the amount of economic regulation by the federal government
B)an increase in the level of taxes assessed by state governments
C)an increase in the amount of economic regulation by the state governments-Consider This: Generally,laissez-fair economic policies discourage government involvement in the economy.
D)an increase in the tariffs assessed on goods imported into the United States

Question 34

Upon taking office in 2009,for which of the following did President Obama advocate in order to deal with the economic crisis?

A)lowering interest rates -Consider This: Monetary policies are shaped by the Federal Reserve Board,while fiscal policies are shaped by Congress and the president.
B)a massive economic stimulus bill
C)increasing middle-class taxes
D)a balanced-budget amendment

Question 35

Which of the following would indicate that the economy is experiencing inflation?

A)The cost of groceries is increasing.
B)Goods are becoming less expensive.-Consider This: Within the context of inflation,good are becoming more expensive.
C)The federal government is lowering tax rates.
D)The Federal Reserve is increasing the money supply.

Question 36

What is the main goal of fiscal policy?

A)affect how much money is available to foreign governments for investment
B)use taxes and government spending to help stimulate or slow down the economy
C)determine how much interest the government will pay on the federal debt
D)stimulate the economy by increasing the number of imports into the United States -Consider This: Stimulation of the economy in this area is shaped by trade agreements between countries.

Question 37

Which tax is one in which the burden falls relatively more heavily on low-income groups than on wealthy taxpayers?

A)progressive -Consider This: A tax by which the government takes a greater share of the income of the rich than the poor.
B)regressive
C)proportional
D)severance

Question 38

What is the main purpose of monetary policy?

A)to control the supply of money and credit
B)to control the amount of public debt sold to foreign states
C)to control the interest rates on money lent to foreign states -Consider This: Foreign states determine lending interest rates.
D)to equalize income disparity among citizens

Question 39

When it comes to strengthening the economy,what are Republicans more likely to prioritize than Democrats?

A)fighting inflation
B)fighting unemployment -Consider This: Democrats are more concerned with keeping unemployment low.
C)increasing taxes
D)increasing spending

Question 40

What distinguishes a means-tested program from a social insurance program?

A)A means-tested program extends benefits based on age categories,while a social insurance program provides benefits based on immediate need.
B)A means-tested program only extends benefits to the elderly,while a social insurance program extends benefits to everybody.-Consider This: Means-tested program like food stamps provide benefits to those with specific needs,while social security or entitlement programs like Social Security provide benefits to qualified individuals regardless of needs.
C)A social insurance program extends benefits only to the working poor,while a means-tested program extends benefits to everyone,regardless of social class.
D)A social insurance program provides benefits to those who have paid into the program,while a means-tested program provides benefits based on demonstrated need.

Question 41

Which of the following is a possible solution to the long-term problem of solvency in the Social Security program?

A)increase benefits for retirees who have substantial income from other sources
B)increase the minimum retirement age
C)revise the inflation adjustment formula for benefits so that recipients would receive more of a raise every year
D)lower the payroll tax contribution -Consider This: This is one of the Social Security reform suggestions.

Question 42

Which of these statements best describes the possible effect of efforts by the Federal Reserve Board to lower interest rates?

A)They can lead to lower capital gains tax rates.
B)They can lead to higher unemployment in years of budget deficits.
C)They can spur economic growth by increasing the cost of money for business.-Consider This: The Federal Reserve Board sets interest rates used by banks to borrow money.
D)They can spur economic growth by increasing the available money supply.

Question 43

What is causing the scope of government to increase?

A)poor economic management by the Federal Reserve board -Consider This: Federal Reserve board is involved in shaping monetary policy.
B)the growth in social welfare spending for programs like Social Security and Medicare
C)frequent and lingering episodes of inflation
D)increasingly regressive taxes and rising energy costs

Question 44

If the Fed were to have raised interest rates in the months leading up to the 2012 presidential election,what might have been the expected outcome?

A)The economy would have become stronger.-Consider This: Raising interest rates is likely to weaken the economy because the borrowing of money becomes more expensive.
B)The economy would have weakened further.
C)Imports would have increased.
D)Unemployment would have decreased.

Question 45

What are you most concerned with if you subscribe to Keynesian economic policies?

A)exports
B)unemployment
C)inflation -Consider This: Monetary policy is mostly concerned with inflation.
D)money supply

Question 46

Which of the following factors might explain the declining poverty rate among the elderly?

A)the feminization of poverty -Consider This: Concerns the increasing concentration of poverty among women.
B)progressive taxation
C)Social Security and Medicare
D)supply-side economics

Question 47

Which of the following is an example of monetary policy?

A)decreasing federal spending -Consider This: This is an example of fiscal policy.
B)increasing food and drug regulations
C)increasing income taxes on wealthy Americans
D)the Federal Reserve Board buying government bonds

Question 48

Which of the following do Republicans tend to support?

A)demand-side economics
B)government spending to stimulate the economy
C)supply-side economics
D)Keynesian economics -Consider This: Republicans have criticized Keynesian economic policies as promoting the idea that the government can spend money more widely than the people.