Exam 2 Quizzes Answers

Question 1

Economists believe that politicians act in their own self interest. We call them _______ because they do that.

Answer 1

rational actors

Question 2

Economists believe that government bureaucrats do not respond to incentives, unlike private sector employees who do.

Answer 2

False

Question 3

Rational Ignorance theory says that, because our individual vote does not matter, voters generally don’t benefit by spending the time to inform themselves fully about candidates for office.

Answer 3

True

Question 4

Economists believe that politicians’ primary concern is maximizing

Answer 4

the chance of getting elected or reelected

Question 5

Rational Ignorance tells us that politicians look for issues that benefit _______, whose costs are ________

Answer 5

few, shared among many

Question 6

Because of Rational Ignorance, single issue voters are _____.

Answer 6

more likely

Question 6

If we require 100% agreement to create a law, it let’s the minority control the majority. In our current system where we normally require just 50% + 1 vote, the majority can do bad things to the minority. There is no voting system that gives the majority control while protecting completely the minority.

Answer 6

True

Question 7

To protect us from tyranny and/or the domination of the few, the Founding Fathers:

Answer 7

created a large Congress, and a weak president

Question 8

The median voter model tells us that most presidents will move toward the center of all voters in the country after being elected.

Answer 8

True

Question 9

When politicians trade votes (you vote for my bill and I’ll vote for yours), it is called:

Answer 9

log rolling

Question 10

Money that has value because of an order by the government is called ______ money

Answer 10

fiat

Question 11

An increase in the money supply should _____ interest rates.

Answer 11

decrease

Question 11

In US history,

Answer 11

deer and tobacco leaves were used as money
states printed their own money
banks were allowed to print money
Correct Answer
all of the above

Question 12

Most of the money in the country is actually created by banks when they make loans.

Answer 12

True

Question 13

The Federal Reserve System is intended to be independent of Congress and the President, because it is believed that countries with independent central banks have lower inflation rates over time.

Answer 13

True

Question 14

The McCulloch v. Maryland decision said that:

Answer 14

states may not tax the federal government

Question 15

In Hepburn v. Griswold, the Supreme Court said fiat money was a violation of the Constitution. Two years later, the Supreme Court reversed itself and said it was not.

Answer 15

True

Question 16

Which of the following is true about the Wizard of Oz?

Answer 16

Dorothy’s slippers are made of silver in the book

Question 17

The Cross of Gold speech

Answer 17

supported workers over Wall Street

Question 18

The Constitution says states are forbidden to print their own money.

Answer 18

True

Question 19

A system that has more than one level of governments is called a ______ system.

Answer 19

Federal

Question 20

There are about _______ governments in the USA

Answer 20

70,000

Question 21

The taxes available to the US government in the Constitution when it was written were tariffs and excise taxes, and they had to have uniform rates across the country.

Answer 21

True

Question 22

UNLV is located in

Answer 22

Paradise

Question 23

A tax that is designated for a specific purpose is called a(n) ______ tax

Answer 23

earmarked

Question 24

The national excise taxes used in Europe and many other countries are called:

Answer 24

VAT

Question 24

When someone legally manages to reduce their taxes, we call this tax

Answer 24

avoidance

Question 25

Economists believe that a sales tax

Answer 25

is split partly to the consumer and partly to the business

Question 26

The personal income tax system in the US is intended to be

Answer 26

The personal income tax system in the US is intended to be

Question 27

Corporate dividends are often taxed twice, once as profits under the corporate profits tax, and once as income under the personal income tax.

Answer 27

True