2. The American Recovery and Reinvestment Plan aimed to do which of the following?

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1 16 Domestic Policy Multiple-Choice Questions 1. The Affordable Care Act, colloquially known as Obamacare, deals primarily with what policy area? a. education b. health care c. welfare d. economics e. criminal justice 2. The American Recovery and Reinvestment Plan aimed to do which of the following? a. eliminate jobs in the financial sector b. close underperforming schools c. supplement education programming at the state level d. refinance the national debt e. reduce salaries 3. Who was John Dewey? a. a mid-level bureaucrat who guided education policy in the late nineteenth century b. a high-level bureaucrat who guided education policy in the late nineteenth century c. a philanthropist who guided education policy in the late nineteenth century d. an education reform advocate in the late nineteenth century e. a Vermont senator and education reform advocate in the 19 th century 4. Medicare is a program in which policy area? a. welfare policy b. health policy c. education policy d. environmental policy e. foreign policy

2 5. Which of the following is a supplement to Social Security? a. Medicaid b. No Child Left Behind c. Medicare d. Temporary Assistance for Needy Families e. Elementary and Secondary Education Act 6. How many coverage components does Medicare have? a. 1 b. 2 c. 3 d. 4 e Medicare and Medicaid generally fall within which policy area? a. education b. criminal justice c. welfare d. health care e. environmental protection 8. Medicare is aimed at what group of people? a. children b. business owners c. people over sixty-five, or disabled d. the poor e. college students 9. What period of U.S. history marked a clear change in the federal government s role in domestic policy making? a. the 1930s b. the 1960s c. Watergate d. the Reagan administration e. the Great Society

3 10. Which element of policy making is government recognition that a problem is worthy of intervention? a. agenda setting b. agenda adoption c. policy formation d. policy implementation e. policy evaluation 11. What percentage of taxpayers believe that the Affordable Care Act will improve the health care system? a. 30% b. 40% c. 50% d. 60% e. 70% 12. What percentage of Americans account for most healthcare expenditures? a. 10% b. 25% c. 30% d. 40% e. 50% 13. The Framers of the Constitution created a decentralized policy-making process with powers shared by Congress, the president, the courts, and the? a. political parties b. dedicated special-interest groups c. large land holders d. legislative think tanks e. states 14. Which president helped to create modern welfare policy in the United States? a. Dwight Eisenhower b. Franklin Roosevelt c. Jimmy Carter d. Ronald Reagan e. Theodore Roosevelt

4 15. Students graduate from college with an average debt of. a. $5000 b. $7800 c. $11,400 d. $23,000 e. $42, Which of the following pieces of legislation is most likely to ensure that people have health insurance? a. the Affordable Care Act b. the Social Security Act c. Medicare d. Medicaid e. the American Recovery and Reinvestment Act 17. According to Figure 16.2 which of the following categories has the highest level of expenditures when it comes to health care? a. hospital care b. physician/clinical services c. home health care d. prescription drugs e. nursing care facilities 18. Which decade is referred to as the environmental decade? a. 1950s b. 1960s c. 1970s d. 1980s e. 1990s 19. Which state in 2002 took the initiative to reduce greenhouse gas emissions? a. Alabama b. Mississippi c. New Mexico d. Nevada e. California

5 20. Which of the following pieces of legislation represents an attempt by the federal government to help states with education costs? a. the American Recovery and Reinvestment Act b. the Social Security Act c. the Affordable Care Act d. the Elementary and Secondary Education Act e. the No Child Left Behind Act 21. Which of these was a consequence of the Race to the Top initiative? a. States have begun to adopt a common core curriculum. b. The unemployment rate has steadily declined. c. The federal government has stopped spending money to curb inflation. d. Several new banks have emerged. e. The federal government has left the financial markets to regulate themselves. 22. The Supreme Court s landmark decision in Brown v. Board of Education(1954) ruled that separate educational facilities for black and white students were. a. inherently unequal b. acceptable if equal money per pupil were spent by states c. equal under the law d. a choice for states to make e. acceptable if sanctioned by the Department of Education 23. Which is a subset of the other? a. Domestic policy is a subset of public policy. b. Public policy is a subset of domestic policy. c. United States welfare policy is a subset of Health and Human Services. d. State courts are a subset of federal courts. e. County roads are a subset of the Federal Highway System. 24. Which of these resulted from President Roosevelt s New Deal? a. The federal government cut Social Security benefits because it lacked adequate funds. b. The federal government created Social Security and Aid to Families with Dependent Children. c. The states assumed new responsibilities for the management of national economic matters. d. The federal government devolved responsibility for solving the economic crisis to the states. e. The federal government took a laissez-faire approach when dealing with economic matters.

6 25. Why is the federal government involved in education? a. Several presidents have pushed for public education reform. b. The federal government felt that states were failing at this. c. The federal government felt that local governments were failing in this arena. d. Private schools now outnumber public schools in the United States. e. To push U.S. student performance in math and science ahead of every other developed nation. 26. Crises such as Hurricane Katrina or the 2008 financial collapse often result in which action? a. agenda setting b. agenda adoption c. policy formulation d. policy implementation e. policy evaluation 27. Which of the following is true in the United States of how government handles ensuring health care to the poor and the elderly? a. Medicare provides health care to the poor, and Medicaid provides health care to the elderly. b. Medicare provides health care to the elderly, and Medicaid provides health care to the poor. c. Medicare and Medicaid provide health care to all Americans regardless of wealth or age. d. Medicare replaced Medicaid in order to provide health care to poor people as well as the elderly. e. Medicaid replaced Medicare in order to provide health care to poor people as well as the elderly. 28. What political movement led to reforms in response to the industrial revolution in the United States? a. Communism b. Progressivism c. Socialism d. Creationism e. Capitalism 29. Which of the following provides one explanation for why Medicare costs have risen in recent years? a. People now are in better health than were people in the past. b. People rely on their own private insurance to supplement Medicare. c. Most people on Medicare also receive Medicaid benefits. d. Doctors charge less for many services than they did in the past. e. People live longer today than they did in the past.

7 30. Which of the following is true of the federal government s role in education? a. The federal government never plays a role in education. b. The federal government is the primary governmental level involved in education. c. The federal government has only been involved in education since the year d. The federal government takes over underperforming schools. e. The federal government addresses issues of inequality and ensures that standards are met. 31. Students in the United States typically. a. perform better on both math and science tests than students in other countries b. perform equally on math and science tests compared to students in other countries c. perform worse on both math and science tests than students in many other countries d. perform better on math tests but worse on science tests compared to students in other countries e. perform better on science tests but worse on math tests compared to students in other countries 32. Which of the following is true of Social Security benefits? a. Benefits under Medicare Part A are automatic when a person qualifies for Social Security. b. Benefits under Medicare Part B are automatic when a person qualifies for Social Security. c. Benefits under Medicare Part D are automatic when a person qualifies for Social Security. d. Benefits under Medicare Part A, B, and C are automatic when a person qualifies for Social Security. e. Benefits must be requested and are never automatic. 33. What is the function of Medicaid? a. federal funding of state medical programs b. state funding of federal medical programs c. subsidized medical care for the poor d. a supplement for Medicare e. prescription drug plan for Medicare 34. Which program is one of the first entitlement programs created under the New Deal? a. food stamps b. Social Security c. Medicaid d. Temporary Assistance for Needy Families e. Medicare

8 35. Which is true of crises? a. They can create momentum for an issue. b. They often bring down presidencies. c. They often lead to political realignment. d. Crises are often good for the economy. e. They do not affect presidents in the long term. 36. Which of the following is most accurate about Social Security? a. Social Security will eventually be replaced by a private system. b. Social Security qualification triggers Medicaid participation. c. Qualification for Medicare results in nearly automatic Social Security payments. d. Social Security is expected to be financially stable for the next 100 years. e. Social Security qualification triggers Medicare Part A. 37. The publication of Rachel Carson s Silent Spring focused the nation s attention on which of the following? a. recreational areas b. environmental damage from toxic and hazardous wastes c. water shortages d. sinkholes e. noise pollution from airports near populated areas 38. Which of the following is true of gas prices and gas taxes in the United States in comparison to the United Kingdom, Germany, and France? a. Both gas prices and gas taxes are higher in the United States than in the United Kingdom, Germany, and France. b. Both gas prices and gas taxes are lower in the United States than in the United Kingdom, Germany, and France. c. Gas prices are higher in the United States than in the United Kingdom, Germany, and France, but gas taxes are lower. d. Gas taxes are higher in the United States than in the United Kingdom, Germany, and France, but gas prices are lower. e. The United States has similar gas prices and gas taxes compared to the United Kingdom, Germany, and France. 39. The United States consumes percent of the world s oil, while only containing percent of the world s oil reserves. a. 15/5 b. 18/10 c. 20/2 d. 25/3 e. 25/20

9 40. Which is an argument in favor of federal involvement in public policy? a. The states have a long-standing tradition of extending rights to citizens. b. The states are often viewed as laboratories of democracy. c. The federal government can best deal with some problems or matter of concern. d. Federal legislation often increases inequality. e. Federal power is usually transferred to the states. 41. President Theodore Roosevelt embraced which policy area? a. conservation b. education c. military reform d. civil rights e. science funding 42. Health care costs in the United States. a. have lowered dramatically in the last few years b. have risen dramatically in the last few years c. have risen slowly in the last few years d. are influenced by science research funding e. reflect the excellence of U.S. health care 43. Under which of the following conditions would increasing the age at which people become eligible for Medicare make sense? a. if life expectancy decreases b. if life expectancy increases c. if Medicaid expands to include a greater number of people d. if the Affordable Care Act, colloquially known as Obamacare, is repealed e. if the Affordable Care Act, colloquially known as Obamacare, is strengthened 44. Which was used as evidence in support of the Affordable Care Act? a. Private insurance companies are adequate for providing health care coverage to most Americans. b. Uninsured Americans have access to health care because hospitals are required to treat patients with life-threatening conditions. c. Health care costs have risen substantially over the past few decades. d. Health care costs have remained stable over the past few decades. e. Health care costs have declined over the past few decades.

10 45. Which explains why the federal government has been involved in problem solving, following disasters like Hurricane Katrina? a. The federal government has jurisdiction in these situations. b. The federal government doesn't trust the states to handle disasters. c. The federal government is more knowledgeable about the areas in which disasters occur. d. The federal government has the resources to deal with disaster situations. e. The federal government has the ability to prevent the states from creating public policy. 46. What do Medicare, Medicaid, and Social Security have in common? a. They are all health care programs. b. They are all entitlement programs. c. They all provide financial assistance to senior citizens only. d. They all provide food stamps to people in poverty. e. They all provide small business loans to get the poor out of poverty. 47. Which statement most closely reflects a laissez-faire attitude? a. The federal government should intervene to bail out business owners. b. The federal government should work with state governments to help business owners. c. The federal government should provide loans to assist business owners with environmental cleanup. d. The federal government should not intervene, trusting in the market to balance itself. e. The federal government should only assist manufacturers who request environmental or financial assistance. 48. Entitlement programs such as Social Security and Aid to Families with Dependent Children led to which of the following over time? a. getting the poor out of poverty b. helping to ensure equality in public school funding c. helping to provide income to low-earning households d. expansion to provide financial aid to poor college students e. expansion of the federal role in domestic policy 49. What is the major source of electrical power in the United States? a. coal b. oil c. natural gas d. nuclear power e. hydroelectric power

11 50. Which of the following, if true, demonstrates how policy making is decentralized in the United States? a. The United States has a unitary form of government. b. Congressional power often trumps state power. c. The states have authority over policy making in areas such as education. d. The federal government is responsible for Medicare and Medicaid. e. State powers are not enumerated in the Constitution. 51. Of the following, which produces the most greenhouse gases, and poses the greatest concerns surrounding climate change? a. wind power b. coal and oil c. natural gas d. nuclear power e. hydroelectric power 52. Which of the following explains why some people have suggested reducing our use of coal and oil? a. Oil and coal are targets for terrorists. b. Oil and coal are less efficient than solar power. c. Oil and coal create greenhouse gases. d. Oil and coal supplies will soon run out. e. Oil and coal extraction is costly. 53. Which act reduced automobile emissions? a. Environmental Protection Act b. Clean Air Act c. No Child Left Behind d. Race to the Top e. National Environmental Policy Act 54. If all citizens who are sixty-five years and older are eligible for Medicare, but only economically disadvantaged citizens are eligible for Medicaid, which of the following is also true? a. Both Medicare and Medicaid are principally retirement programs. b. Both Medicare and Medicaid are means-tested programs. c. Medicare is an entitlement program, but Medicaid is for the poor. d. Medicare is a means-tested program, but Medicaid is an entitlement program. e. Medicare and Medicaid have been replaced by Temporary Assistance for Needy Families.

12 55. Which of the following is an example of federal involvement in K-12 education? a. Praising states that promote educational equality in K-12 education. b. Funding pro-education candidates at the state level. c. Funding school renovation in economically disadvantaged areas. d. Providing monetary incentives for state compliance with standardized goals. e. Providing diversity awareness training for teachers. 56. Why has national health insurance not been adopted in the United States? a. Liberals want insurance to be provided by private companies. b. Strong opposition by the American Medical Association. c. Nearly all Americans currently have health insurance. d. No Americans want national health insurance. e. The United States has one of the world s highest ranked health systems. 57. What changed during the 1930s as far as the government's role in domestic policy making? a. Congress took a stronger role b. the President took a stronger role c. the Supreme Court took a stronger role d. the President took lesser role e. the government ceded the role to private enterprise 58. Colleges comply with Title IX of the Educational Amendments Acts of 1972 because. a. young people are likely to follow politics and are likely to vote b. women s sports have become equally as popular as men s sports c. they have received federal money either directly or indirectly d. seniors are likely to follow politics and are likely to vote e. they are liberal institutions and favor government intervention 59. Which of the following federalism-related concerns applies to the No Child Left Behind Act (NCLB)? a. The states view provisions of the NCLB act as a mandate, and they may not have the funds to pay for meeting certain requirements. b. The federal government spends more on public education than the states and therefore is dominant in this policy area. c. The states are not required to comply with NCLB provisions because participation is voluntary. d. Federal guidelines provide varying standards across states. e. Local school districts do not have to comply with state or federal educational requirements.

13 17 Economic Policy Multiple-Choice Questions 1. Inflation is best understood as the rate at which. a. gross domestic product expands b. prices for goods and services decrease c. prices for goods and services increase d. the federal government increases taxes to raise revenue e. the Federal Reserve Board expands the money supply 2. What do economists use gross domestic product to measure? a. the rate of government spending in the economy b. the rate of tariffs applied to goods imported into the United States c. the total impact of import revenues on the domestic economy d. the total value added by government expenditures in the economy e. the total value of goods and services produced in the economy 3. In the nineteenth century, industrialization worsened the effects of natural. a. business cycles b. deregulation c. economic cycles d. economic regulation e. inflation 4. Laissez-faire economics holds which of the following to be true? a. The government should actively intervene in the economy. b. The government should not take an active role in the economy. c. The government should do everything possible to reduce unemployment. d. The government should lower interest rates during a recession. e. The government should raise interest rates during a recession.

14 5. Which of the following is true with respect to Keynesian economic policy? a. Keynesian economic policy relies on government taxes and adjustments to the money supply to control inflation and unemployment. b. Keynesian economic policy relies on taxation and expenditures by government to control inflation and unemployment. c. Keynesian economic policy uses the money supply to control inflation and unemployment. d. Keynesian economic policy can only be used by the federal government. e. Keynesian economic policy can only be used by state-level governments. 6. The size of the national debt is. a. declining b. rising c. marginal d. stagnating e. unchanged 7. Which of the following is true about Social Security? a. It is a form of accident insurance. b. It is considered a means-tested program. c. It is only available to the very wealthy. d. It is entirely supported by property taxes. e. It is a retirement benefit program for citizens. 8. What is the source for the money in the Social Security Trust Fund? a. sales taxes b. payroll taxes c. progressive taxes d. property taxes e. income taxes 9. One of the biggest concerns surrounding the Social Security Trust Fund is that. a. the benefits being paid out are too low b. the FICA contribution is currently too high c. there is not enough money to pay current retirees d. there will not be enough money to pay future retirees e. wealthy citizens are denied access to payments

15 10. Which of the following strategies does monetary policy dictate in inflationary periods? a. Congress should balance the federal budget. b. Congress should increase spending. c. Congress should raise taxes on citizens. d. The Federal Reserve should lower interest rates. e. The Federal Reserve should raise interest rates. 11. What is a government program called that provides benefits to all citizens who meet eligibility requirements? a. a basic program b. an entitlement program c. an envelopment program d. a minimum program e. a recessionary program 12. The total market value of all goods and services produced in an area during a year is termed which of the following? a. greatest national product b. gross domestic product c. maximum national product d. minimum domestic product e. national income product 13. Which of the following constitutes the largest portion of the federal budget? a. discretionary spending b. foreign aid c. homeland security d. mandatory spending e. military spending 14. Medicare is what type of federal program? a. discretionary b. means-tested c. social insurance d. TANF e. arbitrary

16 15. What is the primary tool that monetary policy uses to affect the overall economy? a. labor regulations b. foreign monetary investment c. government spending d. interest rates e. taxation rates 16. Which of the following entities is responsible for setting interest rates in the United States? a. the Congress b. the Congressional Budget Office c. the Executive Office of the President d. the Federal Reserve Board e. the Office of Management and Budget 17. Which of the following terms describes U.S. economic policy during the nineteenth century? a. fiscalism b. Keynesianism c. laissez-faire d. managed regulation e. monetarism 18. What is the main purpose of monetary policy? a. to affect how much money is available to businesses and banks b. to control the amount of public debt sold to foreign states c. to control the interest rates on money lent to foreign states d. to equalize income disparity among citizens of the United States e. to expand the government's revenue base so as to reduce the deficit 19. The main goal of fiscal policy is. a. to affect how much money is available to foreign governments for investment and its cost b. to affect how much money is available to state governments for capital projects c. to determine how much interest the government will pay on the federal debt d. to stimulate the economy by increasing the number of exports into the United States e. to use taxes and government spending to help stimulate or slow down economic growth

17 20. What distinguishes a means-tested program from a social insurance program? a. A means-tested program extends benefits based upon age categories, while a social insurance program provides benefits based upon immediate need. b. A means-tested program only extends to benefits for the elderly, while a social insurance program extends benefits to everybody. c. A social insurance program extends benefits only to the working poor, while a meanstested program extends benefits to everyone, regardless of social class. d. A social insurance program provides benefits based upon demonstrated need, while a means-tested program provides benefits based upon lifetime contributions. e. A social insurance program provides benefits based upon lifetime contributions, while a means tested program provides benefits based upon demonstrated need. 21. Why are some safety net programs referred to as entitlements? a. because benefits are distributed automatically to citizens who qualify, based on a set of guidelines b. because they are benefits available only to the working poor in the United States c. because they are benefits funded through the Title 9 section of the 1965 Civil Rights Act d. because they are benefits that are distributed on a case-by-case basis to select citizens in extreme need e. because they are benefits that one earns by working, and thus the person is entitled to them 22. Which of the following helps explain the difficulty in solving the long-term debt problem in the United States? a. The decline in the strength of American political parties in recent years has made compromise in this area highly unlikely. b. The decline in social spending has reduced the level of economic growth in the United States. c. The Democratic Party has been captured by special interest groups that benefit from high levels of debt. d. The Republican Party refuses to reduce the level of taxes that restrict economic growth in society. e. The rise of extreme partisanship in recent years has made compromise in this area highly unlikely. 23. What is the purpose of deregulation in the American political economy? a. Deregulation seeks to increase the barriers to economic productivity. b. Deregulation seeks to increase the political power of labor unions. c. Deregulation seeks to increase the power of large economic monopolies. d. Deregulation seeks to remove inefficient barriers in the collection of taxes. e. Deregulation seeks to remove inefficient barriers to productivity and growth.

18 24. Regulatory legislation at the start of the twentieth century primarily dealt with. a. business monopolies b. education c. labor unions d. technology e. the environment 25. The primary purpose of the Troubled Assets Relief Program (TARP) was to. a. bail out the auto industry b. bail out the banking sector c. reduce the annual budget deficit d. reduce the national debt e. respond to rising unemployment 26. The annual shortfall between federal revenues and expenditures is known as which of the following? a. the balance of payments b. the budget deficit c. the expenditure difference d. the national debt e. the trade deficit. 27. If the Federal Reserve wanted to slow the rate of economic growth, it would most likely. a. encourage the president to lower taxes b. increase interest rates c. encourage the president to raise taxes d. increase the money supply e. lower interest rates 28. In general, a recession does which of these? a. generates a response by state governments b. generates a response by the federal government c. lasts at least a year d. leads to higher inflation e. reduces the unemployment level

19 29. Which of the following is true regarding mandatory spending policies? a. They are designed to increase the money supply to improve economic growth. b. They are designed to help states avoid having a budget surplus. c. They create a serious ongoing financial burden on the federal government. d. They reduce the overall cost of compliance for major industrial sectors. e. They reduce the overall cost of doing business overseas. 30. In a(n) state, the government takes an active role in guiding and regulating the private economy. a. capitalist b. democratic c. interventionist d. laissez-faire e. socialist 31. U.S. monetary policy involves which of the following? a. import and export policies b. interest rates and the money supply c. supply-side economics d. NAFTA and the balance of trade with Canada e. the national debt and the annual deficit 32. Which of the following statements regarding the role of the federal government in the economy is correct? a. Economic regulation of industry is the sole responsibility of the secretary of the treasury. b. Most Americans would prefer an economy completely free of any federal regulations. c. Since the Great Recession, the scope of federal activity in the economy has contracted. d. The U.S. Constitution restricts direct regulation of the economy to state governments. e. Presidential election outcomes are heavily influenced by the health of the economy. 33. Which of these statements best characterizes the effects of the recent economic crisis? a. Americans have greater trust in the ability of corporations to be self-regulating. b. Most small businesses have experienced renewed prosperity and growth. c. The Federal Reserve has kept interest rates high to encourage economic investment. d. The federal budget deficits decreased, while the national debt increased. e. The overall influence of the federal government in the economy has increased.

20 34. If the Federal Reserve Board needed curb inflation, it would most likely. a. lower interest rates b. lower taxes c. increase government spending d. raise interest rates e. raise taxes 35. Lowering the discount rate would have which of the following effects? a. It would decrease the amount of bonds sold to multinational corporations. b. It would discourage banks from increasing their borrowing from the Federal Reserve. c. It would encourage banks to borrow more and to extend more loans at lower rates. d. It would increase the amount of federal bonds sold to foreign countries. e. It would decrease the overall rate of taxation for investment banks. 36. An entitlement program provides benefits to. a. all citizens of the United States b. citizens who have made payroll tax contributions c. citizens who meet eligibility criteria d. legal immigrants with a work visa e. only the very wealthy 37. Which of the following provides the greatest source of revenue for the federal government? a. income taxes b. Medicaid taxes c. regressive taxes d. Social Security taxes e. taxes on cigarettes 38. In an economic slowdown, Keynesian economic policy would advocate. a. decreasing inflation b. increasing government spending c. increasing the money supply d. increasing the unemployment rate e. raising interest rates 39. Upon taking office in 2009, which of the following did President Obama advocate to deal with the economic crisis? a. dropping interest rates b. increasing government spending c. lowering taxes d. raising interest rates e. reducing taxes

21 40. If Congress adopts a policy to make cars more fuel efficient, they have adopted a. a. fiscal stimulus policy b. microeconomic policy c. monetary policy d. regulatory policy e. supply-side economic policy 41. Which of the following would indicate that the economy is experiencing inflation? a. Interest rates are increasing. b. Goods are becoming less expensive. c. The federal government is lowering tax rates. d. The Federal Reserve is increasing the money supply. e. The federal tax rates are increasing. 42. Which of these is most consistent with the philosophy of Keynesianism? a. interest rate increases by the Federal Reserve b. government actions to increase debt owned by foreign countries c. government decisions to increase the money supply d. government provision of the 2008 federal stimulus package e. deregulation efforts of President Reagan in the 1980s 43. Which of the following is accurate with regard to the national debt? a. The national debt as a percentage of GDP has drastically increased in recent years. b. The national debt as a percentage of GDP has not changed in the past decade c. The national debt is a product of balanced federal budgets. d. The national debt is not affected by external events such as war or a natural disaster. e. The national debt has only increased under Democratic presidents. 44. Which of the following most accurately describes the recent financial crisis in the United States? a. a depression b. a full employment cycle c. a mild recession d. a severe recession e. an inflationary cycle

22 45. If you support laissez-faire economic policies, you would generally favor. a. a reduction in the amount of economic regulation by the government b. a reduction in the level of taxes assessed by state governments c. an increase in the amount of economic regulation by the government d. an increase in the collective bargaining rights for labor unions e. an increase in the tariffs assessed on goods imported into the United States 46. Which of the following would be considered a regulatory policy? a. a social insurance policy b. a food safety policy c. a monetary policy d. a redistributive policy e. a federal stimulus policy 47. Which of the following is an example of monetary policy? a. decreasing federal spending b. increasing food and drug regulations c. increasing taxes on wealthy Americans d. lowering interest rates e. lowering state property and sales tax 48. If the Federal Reserve wanted to increase lending by banks, what would it do to reserve requirements? a. Lower the discount rate on bank reserve requirements. b. Lower the rate of taxation on bank reserve requirements. c. Lower the reserve requirements for banks. d. Increase the discount rate on bank reserve requirements. e. Raise the reserve requirements for banks. 49. Why might some businesses lobby for increased regulation by the federal government? a. because they do not know that regulations always hurt them b. to lower their overall tax rate c. to gain access to federal bureaucrats who will act in their interests d. to increase their profit margins to better serve the public good e. to protect themselves from domestic and foreign competitors 50. Which of the following best characterizes the federal budget process? a. complicated b. effective c. fair d. fast e. streamlined

23 51. Which of these statements best describes the influence of interest rate adjustments by the Federal Reserve? a. They always lead to lower rates of marginal taxes. 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. d. They can spur economic growth by increasing the available money supply. e. They increase corporate profits by making money more available. 52. What is the purpose of government regulation of the economy? a. to increase the revenue collected by the federal government b. to increase the overall level of taxes paid by produces in the economy c. to increase the level of profits for multinational corporations d. to minimize the costs of doing business for corporations e. to minimize the effects of negative externalities 53. What is the long-term concern about the Social Security Trust Fund? a. The rate of Social Security payroll taxes will continue to decrease. b. The number of current retirees contributing to the fund will continue to decrease. c. The working poor will not have access to Social Security medical benefits. d. There will be too few workers contributing to support the increasing number of retirees. e. There will be too many people paying into the Social Security system. 54. Which of the following was the biggest contributor to the economic crisis that began in 2008? a. deregulation of the investment banking industry b. high levels of government spending c. increased wage demands by labor unions d. inflationary policies by the Federal Reserve e. massive increases in federal budget deficits 55. If a government wanted to use monetary policy to increase economic growth, which of the following steps should be taken? a. Decrease interest rates to increase the amount of money in supply. b. Increase the amount of foreign currency kept on reserve in U.S. banks. c. Increase the amount of public revenue for investment by raising taxes. d. Increase the government spending on public works projects. e. Print a larger amount of money to increase the money supply.

24 56. According to Table 17.1, the largest number of Americans benefit from which means-tested program? a. Social Security b. Supplemental Nutrition Assistance Program c. Supplemental Security Income d. Temporary Assistance for Needy Families e. Unemployment insurance 57. Which of the following is a possible solution to the long-term problem of solvency in the Social Security program? a. Eliminate the prescription drug program for seniors. b. Increase the states financial contribution. c. Increase the minimum retirement age. d. Lower the minimum retirement age. e. Lower the payroll tax contribution. 58. If you subscribe to Keynesian economic policies, you are most concerned with. a. exports b. imports c. inflation d. money supply e. unemployment 59. Deregulation of which of the following industries was probably the biggest factor contributing to the economic crisis that began in 2008? a. the airline industry b. the energy industry c. the investment banking industry d. the litigation industry e. the medical technology industry 60. Why is monetary policy often the preferred way to address an economic crisis? a. because even though it is hard to implement, it has fewer long-term consequences than deficit spending. b. because it is both easy to implement and has fewer long-term consequences than deficit spending c. because it is both easy to implement and has fewer long-term consequences than regulatory policies d. because monetary policy can lower taxes, which increases consumer spending and quickly stimulates the economy e. because monetary policy can quickly put more money directly into the hands of the wealthy who then save it

25 18 Foreign and Defense Policy Multiple-Choice Questions 1. The war in Iraq began under and ended under. a. Bill Clinton, George H. W. Bush b. Bill Clinton, George W. Bush c. George H. W. Bush, George W. Bush d. George W. Bush, George W. Bush e. George W. Bush, Barack Obama 2. One of the primary purposes of the war in Afghanistan was to. a. prevent the spread of communism b. remove the Taliban-led government c. protect religious freedom d. retaliate for the bombing of the USS Cole e. protect Iraq from Afghani military attacks 3. Which Cabinet-level department has primary responsibility for U.S. foreign policy? a. Department of Defense b. Department of Justice c. Department of the Interior d. Department of Homeland Security e. Department of State 4. What is the primary responsibility of the Department of Defense? a. to provide for homeland security b. to implement military policy c. to develop foreign policy d. to coordinate domestic security efforts e. to advise the president about national security threats

26 5. What is the role of the national security advisor? a. to consult with academics and others with foreign policy expertise b. to provide the president with information that reinforces the president s foreign policy positions c. to act as a liaison between the Department of Defense and the military d. to lead the Department of Homeland Security e. to give the president independent advice about foreign and military policy 6. Who serves on the Joint Chiefs of Staff? a. the Cabinet secretaries b. the leaders of the armed forces c. the president s foreign policy advisors d. the White House military intelligence corps e. the secretary of defense, the secretary of Homeland Security, and the director of the Central Intelligence Agency 7. Who heads the U.S. intelligence community? a. the director of the Central Intelligence Agency b. the director of National Intelligence c. the chairman of the Joint Chiefs of Staff d. the vice president e. the National Security Agency 8. Which international organization was created after World War II at the urging of the United States? a. the League of Nations b. the United Nations c. the Warsaw Pact d. the World Trade Organization e. the Marshall Plan 9. One highly visible element of U.S. foreign policy in recent years has been the pursuit of and empowerment. a. indigenous rights b. gay rights c. women s rights d. Iraqi troops rights e. civil rights

27 10. What role did Afghanistan play in the September 11, 2001, terrorist attacks? a. Most of the terrorists were from Afghanistan. b. Osama bin Laden trained some of the terrorists in Afghanistan. c. The al-qaeda led government of Afghanistan funded Osama bin Laden. d. The 9/11 terrorists hijacked airplanes originating from Afghanistan. e. The government of Afghanistan actively plotted the 9/11 terrorist attacks. 11. Which of the following countries is a permanent member of the United Nations Security Council? a. Germany b. India c. Spain d. Italy e. the United States 12. Which of the following countries is a member of NATO? a. Russia b. China c. Japan d. Syria e. the United States 13. After the Paris Peace Agreement, when U.S. forces withdrew from the Vietnam War, South Vietnam was. a. independent and isolated b. fully democratic c. reunified with the North d. a new American territory e. permanently separated from the North 14. Who instituted the Marshall Plan and who benefited directly from it? a. The Soviet Union instituted the Marshall Plan to benefit Eastern Europe. b. Germany instituted the Marshall Plan to benefit the United States. c. Italy instituted the Marshall Plan to benefit Western Europe. d. Eastern Europe instituted the Marshall Plan to benefit Western Europe. e. The United States instituted the Marshall Plan to benefit Eastern Europe.

28 15. What event marked the end of the Cold War? a. détente b. the collapse of the Soviet Union c. the signing of the SALT II Treaty d. the Soviet withdrawal from Afghanistan e. the resolution of the Cuban Missile Crisis 16. According to the How Big is the World s Stockpile of Nuclear Weapons? feature box, which of the following countries has the most nuclear weapons after the United States? a. Israel b. China c. Russia d. North Korea e. Iran 17. According to Figure 18.2, who is the largest trading partner with the United States? a. China b. the United Kingdom c. Germany d. Japan e. Canada 18. What was the foreign policy of containment designed to prevent? a. nuclear proliferation b. the spread of communism c. terrorism d. epidemics and pandemics e. the Cold War 19. Why was the North Atlantic Treaty Organization formed? a. to provide peacetime collective security for the United States and Western Europe b. to promote free trade between the United States and Western Europe c. to help rebuild war-torn Europe after World War II d. to enhance democratic government in newly industrializing countries e. to minimize nuclear proliferation 20. Who has the ultimate authority and control over U.S. foreign and military policy? a. Congress b. the president c. the State Department d. the National Security Council e. the Joint Chiefs of Staff

29 21. The United States engaged in which of the following military conflicts in order to prevent the spread of communism? a. World War I b. World War II c. the Vietnam War d. the Persian Gulf War e. the global war on terrorism 22. What was the main purpose of the Marshall Plan? a. to protect Eastern Europe from undue influence of the Soviet Union in the wake of World War II b. to help rebuild Europe after World War II so that it would be less vulnerable to communist influences c. to prevent the spread of weapons of mass destruction to unstable governments d. to root out and eliminate potential terrorist threats before they are fully formed e. to repair relations between the United States and the Soviet Union near the end of the Cold War 23. Which of the following accurately describes the war in Iraq? a. The U.S. administration s decision to become involved was noncontroversial. b. The war lasted longer than the Bush administration expected. c. Saddam Hussein launched the war through an attack on Iran. d. The United States went to war as retribution for its involvement in the September 11, 2001, terrorist attacks. e. The war received near universal praise from U.S. allies. 24. Which of the following is the most heavily involved in gathering and analyzing information about foreign governments? a. the Secret Service b. the Department of the Treasury c. the National Security Agency d. the Transportation Safety Administration e. the Department of State 25. What is the primary responsibility of the secretary of state? a. national defense policy b. homeland security c. intelligence d. diplomacy e. military policy

30 26. What is the primary responsibility of the secretary of defense? a. foreign policy b. intelligence c. diplomacy d. homeland security e. military policy 27. What is the main foreign or defense policy threat posed by Iran? a. civil unrest b. nuclear capabilities c. economic collapse d. trade disagreements e. conventional arms 28. Which of the following best describes the United States policy as a superpower since the end of World War II? a. The United States has refused to enter security alliances with countries around the globe, as that policy might offend other countries and reduce trade with them. b. The United States has focused on policies of democratic enlargement to promote expansion of democracies and free markets throughout the world. c. The United States began decreasing its military budget once the Cold War ended, so it could focus on other matters such as promoting democracy around the world. d. The United States has focused primarily on stomping out communism wherever it exists. e. The United States has focused primarily on economic enlargement to promote increase in trade with all countries throughout the world, regardless of their form of government. 29. Which of the following was a fundamental part of the George W. Bush administration s case for the 2003 war in Iraq? a. Iraq was responsible for the terrorist attacks on the United States on September 11, b. Iraq, along with North Korea and Iran, was a threat to American security interests. c. The Persian Gulf War begun by President George H. W. Bush had never really ended and needed to be brought to a close. d. Saddam Hussein had issued threats against the United States. e. Saddam Hussein had permitted Osama bin Laden to use Iraq for training terrorists. 30. Which of the following countries would have been most opposed to the policy of containment? a. United Kingdom b. France c. Soviet Union d. United States e. Canada

31 31. Which of the following countries have posed challenges to the United States in recent years because of their economic growth and global influence? a. India and France b. Russia and Germany c. Germany and Brazil d. China and India e. Brazil and Spain 32. Congress can exercise influence over foreign policy through its power to. a. command the armed forces b. appoint the secretary of defense c. ratify treaties d. recognize the sovereignty of foreign countries e. receive diplomats 33. Which of the following is comprised of a broad array of the president s foreign policy advisors and is housed within the White House? a. the Department of State b. the Department of Homeland Security c. the Warsaw Pact d. the National Security Council e. the Central Intelligence Agency 34. Which of the following has as its primary responsibility conducting surveillance about the inner workings of countries across the world? a. the Department of Defense b. the secretary of state c. the Central Intelligence Agency d. the World Trade Organization e. the Marshall Plan 35. What is the most common critique of the military-industrial complex? a. Ordinary citizens are generally uninformed about foreign and defense policy. b. Defense industry interest groups have too much influence over U.S. foreign and defense policy. c. The military decision-making process is too slow and complex. d. Congress should have less influence over foreign and defense policy, whereas the president should have more influence. e. Defense contracts are usually awarded to the lowest bidder and not on the basis of expertise or experience, resulting in poor-quality products.

32 36. Free trade agreements are designed to prevent which of the following? a. globalization b. democratic enlargement c. détente d. protectionism e. isolationism 37. Which of the following is most consistent with the foreign policy of isolationism? a. a country s refusal to intervene in an armed conflict between two other countries b. a country s willingness to use diplomatic sanctions to pressure another country to address human rights violations c. the George W. Bush administration s policy of actively rooting out terrorism before a threat has fully developed d. the United States involvement in World War II e. multilateral trade agreements 38. During a rapidly developing national security crisis, who is the U.S. president most likely to turn to for advice? a. the House Committee on Foreign Affairs b. the Senate Committee on Foreign Relations c. the Senate Committee on Homeland Security and Governmental Affairs d. the United Nations Security Council e. the National Security Council 39. What can Congress do to influence foreign and defense policy if it is not satisfied with the way the president has handled foreign policy? a. Congress can fire ambassadors who are not executing foreign policy according to Congress s wishes. b. Congress can reduce appropriations for executing the president s foreign and defense policy. c. Congress can command the military to execute foreign policy according to Congress s wishes. d. Congress can change foreign policy with a joint declaration of two-thirds of each chamber, which does not require the president s signature. e. Congress can appoint a new secretary of state who will implement foreign policy according to Congress s wishes. 40. Which of the following is most consistent with the concept of diplomacy? a. counterintelligence b. military threats c. military action d. negotiation e. confrontation