University of Houston, Downtown

GOV 2405

CHAPTER 14: Domestic and Economic Policy

MULTIPLE CHOICE

1)The Gold Standard

1. 1. was a law that set the value of a currency in terms of a specified quantity of gold.
   2. was used by much of the world until the 1930s.
   3. was finally eliminated in the United States by Richard Nixon in 1971.
   4. is popular with some conservatives today.
   5. All of the above are tru

2. Which of the following are true?
   1. Those arguing for the gold standard tend to be supporters of conservative ideology.
   2. A gold standard may cause deflation.
   3. Those in favor of the gold standard argue that the system can prevent inflation.
   4. A gold standard may cause inflation due to the increase in the price of gol
   5. Options A, B, and C are tru

3. Domestic policy
   1. is limited to policies that affect major economic variables.
   2. can be defined as all policies that affect housing.
   3. can be defined as all the laws, government planning, and government actions that concern internal issues of national importance.
   4. is limited to matters relating to law enforcement.
   5. relates to the activities of the government in its relations with foreign countries.       
4. All of the following are true of domestic policy except
   1. domestic policy ranges from speed limits on interstate highways, to how best to protect our environment, to what should be done about unemployment.
   2. domestic policy is formulated and implemented only by the federal government.
   3. regulatory policy is a type of domestic policy which seeks to define what is and is not legal.
   4. redistributive policy is a type of domestic policy which transfers income from certain individuals or groups to others.
   5. Social Security is an example of domestic policy.

5. Ways in which issues come to be identified as problems include
   1. a crisis occurring.
   2. letters from the constituents to members of Congress.
   3. information provided by interest groups.
   4. reading the local newspaper.
   5. All the above are tru

6. An example of policymaking is the Patient Protection and Affordable Care Act, which

1. 1. was a government take over of the healthcare industry.
   2. seeks to provide health insurance to all Americans.
   3. had its share of opponents.
   4. Options B and C are true.
   5. All of the above are tru

7. Agenda building
   1. is making Congress aware that a problem requires congressional action.
   2. may occur as a result of a crisis.
   3. may occur as a result of a technological change.
   4. may occur through a mass media campaign.
   5. All of the above are tru

8. The Patient Protection and Affordable Care Act
   1. requires services to be paid for by reducing the services to the rich to benefit the poor.
   2. allows for health coverage for unauthorized immigrants.
   3. is a massive overhaul of the nation’s health-care funding system.
   4. was passed after two months of debate in Congress.
   5. All of the above are tru

9. Which of the following is a step in the policymaking process?
   1. Policy implementation
   2. Policy adoption
   3. Policy formation
   4. Agenda building
   5. All of the above are tru

10. Health-care spending
    1. by the government in 2010 constituted about 50 percent of health-care spending in the United States.
    2. by private insurers in 2010 made up about 30 percent of health-care spending in the United States.
    3. through Medicare and Medicaid cover about one-third of all Americans.
    4. is higher in the United States as a percentage of the gross domestic product than many European countries.
    5. All of the above are tru

11. Medicare
    1. is the government program set up for the poor.
    2. costs the government more than Social Security.
    3. was created by President George W. Bush in 2002.
    4. is a federal health insurance program that covers Americans over the age of sixty-five.
    5. All of the above are tru

12. All of the following statements about the Medicare system are true except
    1. it pays for hospital and physician bills for almost all U.S. residents over sixty-five years of age.
    2. it helps pay for prescription drugs for those over sixty-five.
    3. because of caps on reimbursements, some seniors refuse to participate in the program.
    4. it is funded out of general government revenues.
    5. it is funded by a special tax on wages and salaries.   
13. Which of the following is true?
    1. In fiscal year 2013, the total cost of Medicaid and the Children’s Health Insurance Program was about $325 billion. [[ED Note: Changed to match textbook.]]
    2. The number of enrollees in the Medicaid program has dropped from 34 million in 1999 to 24 million today.
    3. The federal government funds the entire cost of the Medicaid Program.
    4. The new healthcare programs passed in 2010 will cover more people, drastically shrinking the number of enrollees on Medicai
    5. Both options B and C are tru

14. Policy formulation is
    1. the process of making the government aware that an issue requires action.
    2. the discussion of proposals between governmental officials and the public.
    3. the process of deciding on a specific proposal.
    4. concerned with the implementation of policy by bureaucrats, the courts, police, and individual citizens.
    5. the process of examining how a policy has worked in practic            
15. All of the following are concerns about health care in the United States except
    1. in 2010, more than 49 million Americans did not have health insurance.
    2. in 2011 employer-provided health insurance cost $5,429 for single coverage and $15,073 for family coverage.
    3. younger workers find it harder to get coverage because they are employed in entry-level jobs without benefits.
    4. the cost of healthcare has been growing at a rapid pace, especially for those over age 65.
    5. new medical technology and services have made health care less expensiv       
16. Universal health insurance
    1. is a new concept that developed within the last 20 years.
    2. began in the United States.
    3. is, by definition, insurance provided by the central government itself.
    4. provides help from the government for businesses.
    5. had been adopted by all advanced industrial countries by the twenty-first century except the United States.

17. The part of the policymaking process that involves choosing a specific policy from among the proposals that have been discussed is known as

1. 1. policy formulation.
   2. policy implementation.
   3. policy adoption.
   4. policy choices.
   5. policy determination.

18. In regard to adopting a health-care reform policy, President Obama
    1. was against any form of major health-care reform.
    2. delegated the drafting of a health-care plan to Congress.
    3. took the lead in developing the health-care plan as Presidents Bush and Clinton had.
    4. eliminated a tug-of-war between the executive branch and Congress.
    5. Both options B and D are tru

19. The individual mandate
    1. is a way to pool resources from the healthy and the sick to cover all of the insured.
    2. was supported by Republicans because it required each person to take personal responsibility for their coverage.
    3. was supported by Congressional Democrats as a way to force parents to cover their children.
    4. required reduction in taxes for those in the middle income range to allow families to pay for mandated coverage.
    5. All of the above are tru

20. The health-care reform legislation that was passed in 2010,
    1. had most of the major provisions in place by the end of 2010.
    2. bars insurance companies from dropping people when they get sick.
    3. was passed by a majority of Republicans and Democrats.
    4. lets young adults stay on their parents’ health plans until age twenty-six.
    5. Both options B and D are tru

21. Policy implementation is
    1. concerned with how policies are carried out by bureaucrats, the courts, police, and individual citizens.
    2. the process of making the media aware of the issue.
    3. the discussion of proposals between governmental officials and the publi
    4. concerned with a specific strategy for the proposal.
    5. when studies are conducted to see what happens after a policy is implemented.
22. Which is true of policy evaluation?
    1. If the policy is not working at the time of evaluation, then the policy is always repealed.
    2. It is the fourth step in policymaking and comes directly after policy adoption.
    3. When a policy has been in place for a while, evaluations are made inside and outside the government to determine if the program is working.
    4. Obamacare has had extensive policy evaluation to date.
    5. There is a time limit to the period of policy evaluation.

23. Regarding immigration, which of the following is true?
    1. Most immigrants come from Latin America or Asi
    2. Hispanics have overtaken African Americans as the largest minority group in the United States.
    3. By 2050, collectively, minority groups will become the majority in the United States.
    4. If minority groups grow and form coalitions, their political power will also grow.
    5. All the above are tru

24. Immigration
    1. at current rates will create a United States where the “white majority” no longer dominates American politics.
    2. is regarded by some as a plus for the United States because it offsets the low birthrate and aging population.
    3. helps expand the workforce and the taxes paid help to support government programs that benefit older Americans.
    4. will result in jobs that pay lower wages for Americans with few skills, some argue.
    5. All of the above are tru

25. Which of the following statements regarding illegal immigrants is true?
    1. The majority of illegal immigrants coming to the United States are from Cub
    2. Most illegal immigrants, once in the United States, stay for the rest of their lives.
    3. Many illegal immigrants send money back to relatives in their homeland.
    4. Few immigrants throughout American history have returned to their homelands.
    5. The laws against hiring illegal immigrants have always been strictly enforced.       
26. Regarding immigration reform
    1. most Republicans are opposed to immigration reform.
    2. some pro-business conservatives do favor reform.
    3. most Democrats oppose reform.
    4. Options A and B are true.
    5. Options A, B, and C are tru

27. In 2012, the Supreme Court ruled that
    1. Arizona could not make it a felony for illegal immigrants to work.
    2. Arizona could not arrest people without warrants just because they might be deportable under federal law.
    3. Arizona could not investigate the immigration status of people they stop for routine traffic violations.
    4. Both options A and B are true.
    5. Options A, B, and C are tru

28. Explanations for the decline in crime rates since 1995 include all of the following except
    1. a booming economy.

28. 2. increased federal expenditures to combat crime.
    3. an increase in the prison population.
    4. the legalization of abortion.
    5. a lack of concern about crime among American citizens.         
29. Which of the following is true?
    1. The United States experienced a great crime wave during the 1920s and early 1930s due to prohibition.
    2. Crime rates grew steadily in the twentieth century.
    3. According to historians, industrialization and urbanization contributed to the rise of crime.
    4. The Western part of the United States had less crime in the nineteenth century due to the fact that all citizens carried guns.
    5. During the Civil War, there was little crime as everyone focused on the war effort. ANS: A
30. Theft rates in the United States
    1. have declined substantially during the last two decades.
    2. are at their highest levels ever.
    3. have declined moderately since 1995 after rising rapidly for two decades.
    4. have remained constant for thirty years.
    5. have risen moderately since 1995 after declining rapidly for two decades.
31. Which of the following statements regarding incarceration in the United States is true?
    1. Many Americans believe that the best solution to the nation’s crime problem is to impose stiff prison sentences on offenders.
    2. The number of incarcerated persons has grown rapidly in recent years.
    3. By 2013, U.S. prisons and jails held 2.4 million people.
    4. Males are ten times more likely to be incarcerated than women.
    5. All of the above are tru

32. The number of incarcerated persons in the United States
    1. includes an equal number of African-American males and females.
    2. has increased requiring more prisons to be built.
    3. has declined in recent years.
    4. is greater in federal prisons than state prisons.
    5. is growing mostly due to arrests to prevent terrorism.           
33. The population group with the highest incarceration rate is
    1. non-Hispanic white men, ages 30–34.
    2. non-Hispanic African American men, ages 30–34.
    3. non-Hispanic Asian American men ages 30–34.
    4. Hispanic men aged 25–29.
    5. non-Hispanic African American women ages 30–35.

34. The number of persons held in jail or prison for every 100,000 persons in a particular population group is known as the
    1. prison rate.
    2. imprisonment numbers.
    3. capacity figures.
    4. incarceration rate.
    5. recidivism rat

35. Which of the following statements regarding incarceration is true?
    1. Incarceration does not prevent average predatory street criminals from committing additional crimes once they are out of prison.
    2. The majority of prisoners are incarcerated for their full sentence.
    3. Incarceration rates for African Americans are much lower than for any other ethnic group.
    4. The majority of people arrested and sent to jail have committed the crime of theft.
    5. Overcrowding is not an issue in prisons.

36. High prices of commodities like oil
    1. provide an incentive to produce more of it.
    2. provide an incentive for producers to slow production to boost prices higher.
    3. provide an incentive to protect the environment.
    4. provide an incentive to develop new technology to extract the oil.
    5. Both options A and D are tru

37. With regard to the issue of oil and energy,
    1. the United States’ dependence on foreign oil is down sharply from just a few years ago.
    2. a new technology called fracking is allowing more oil to be extracted from domestic and Canadian sources.
    3. fracking can only extract oil, not natural gas.
    4. the United States gets nearly 80 percent of its oil and gas from foreign sources.
    5. Both options A and B are tru

38. All of the following are true of global warming except
    1. in the 1990s, scientists working on climate change began to conclude that the average world temperatures would rise significantly in the twenty-first century.
    2. in an effort to stop global warming, the government allowed filling or dredging of wetlands without a permit.
    3. global warming has become a major political issue between conservatives and liberals.
    4. former Vice-President Al Gore won a Nobel Peace Prize for his work on environmental issues.
    5. a major share of the American electorate does not believe that global warming is happening, or if it is happening, that it is caused by human activities.

39. Despite the lack of federal government action, in 2011
    1. CO₂ emissions in the United States were down due to newer fuel-efficient cars.
    2. CO₂ emissions in the United States were down due to new power plants coming on line

that used natural gas instead of coal.

1. 3. CO₂ emissions in the United States were down due to tougher emissions laws passed by states.
   4. CO₂ emissions in the United States were down due to a colder winter.
   5. Options A and B are tru

40. Which of the following statements regarding unemployment is true?
    1. When unemployment is increasing, it is a sign of a recession.
    2. Unemployment figures that estimate the number of unemployed are prepared by the U.S. Department of Labor.
    3. The published unemployment numbers fail to reflect the number of discouraged workers and “hidden unemployed.”
    4. Unemployment is defined as the inability of those in the workforce to find a job.
    5. All of the above are tru

41. Which of the following is true?
    1. A recession is defined as two or more successive quarters in which the economy shrinks instead of grows.
    2. A recession is defined as two or more quarters in which unemployment rates are above 7 percent.
    3. Unemployment is defined as the total number of workers who are not in the work force in any given quarter.
    4. Inflation is defined as a sudden rise in prices for hot commodities like gasoline and electronics.
    5. All of the above are tru

42. Keynesian economics advocates
    1. government control of markets.
    2. manipulation of monetary policy.
    3. the use of government spending and taxing to help stabilize the economy.
    4. acceptance of the theories of Adam Smith.
    5. laissez-faire economics.

43. Long-term unemployment has remained historically high
    1. due to the slow recovery after the Great Recession of 2008.
    2. due to discrimination of those who have been unemployed longer than six months.
    3. causing a decrease in the number of participants in food stamp programs.
    4. Options A and B are true.
    5. All of the above are tru

44. The Great Recession of 2008 caused
    1. an increase in the number of long-term unemployed.
    2. Supplemental Nutrition Assistance Program expenditures (food stamps) to soar.
    3. an increase in discrimination of the long-term unemployed.
    4. a decrease in requests for food assistance because unemployment insurance benefits were

extended.

1. 5. Options A, B, and C are tru

45. Until 2002, the food stamp program imposed an assets test on potential recipients
    1. causing those who had an asset like a car or home to be ineligible.
    2. making it impossible for many recently unemployed to collect food stamps
    3. because the government did not want food prices affected by give aways.
    4. Both options A and B are true.
    5. Options A, B, and C are tru

46. Fiscal policy
    1. is popular with conservatives.
    2. is an approach to stabilize the economy through control of the money supply.
    3. is controlled by the Federal Reserve Bank
    4. is an approach to stabilizing the economy through government spending and taxing.
    5. requires that, during economic slowdowns, the government tighten its belt on spending.     
47. The net public debt is defined as
    1. the total amount owed by all individuals, corporations, and governments in the United States.
    2. the total amount owed by the federal government to individuals, businesses, and foreigners.
    3. a percentage of the gross national product not to exceed ten percent of all gross sales.
    4. money not available for use.
    5. the total amount owed by the federal government to individuals, businesses, and foreigners, as well as interagency borrowings within the government.

48. Monetary policy includes
    1. using changes in the rate at which new money is put into circulation to alter national economic variables.
    2. using changes in the size of the federal budget deficit to alter national economic variables.
    3. regulating tax rates to ensure controlled growth and low inflation.
    4. the economic policies of the president and Congress.
    5. linkage of the consumer price index and the gross national product.
49. Tight monetary policy theory dictates that when the economy is faced with inflation, the government should
    1. increase the supply of credit.
    2. increase taxes.
    3. decrease the supply of credit.
    4. decrease taxes.
    5. take complete control of the economy.

50. The highest rate of taxation that one pays on the last dollar they make is called the

1. 1. progressive tax rate.
   2. regressive tax rate.
   3. marginal tax rate.
   4. tax liability rate.
   5. temporary tax rat

51. In comparing the total amount of taxes collected as a percentage of gross domestic product,
    1. Sweden’s rate is the lowest in the world .
    2. one of the countries with the highest rate is the United States.
    3. most countries in Europe have lower rates than the United States.
    4. the rate of the United States is around 25 percent.
    5. Both options A and C are tru

52. Tax loopholes allow individuals and corporations to
    1. reduce their taxable income legally.
    2. choose the state to which they will pay taxes.
    3. register formal complaints to the Internal Revenue Service.
    4. pay taxes only on investment income.
    5. commit crimes without fear of incarceration.

53. With a progressive tax,
    1. all taxpayers pay taxes at the same percentage rate.
    2. people with higher incomes pay taxes at a higher percentage rate.
    3. people with higher incomes pay taxes at a lower percentage rate.
    4. the tax burden consists mostly of property and sales taxes.
    5. tax rates increase by a set percentage every year.

54. Which of the following is not a regressive tax?
    1. Social security tax
    2. Medicare tax
    3. State sales tax
    4. Federal income tax
    5. Local real estate tax

55. Because of the                        , the United States does indeed have a(n)                     .
    1. income tax, progressive tax system
    2. income tax, regressive tax system
    3. property tax, progressive tax system
    4. Earned Income Tax Credit (EITC), regressive tax system
    5. sales tax, progressive tax system

56. Which of the following is true?
    1. In the last decade, the rich have increased their share of the nation’s income.
    2. In the last decade, after adjusting for inflation, the hourly wages of average workers have