Politics and Economics II

Question 1

Ways the Government Promotes Labor

Answer 1

The government promotes labor through minimum wage, maximum work hours, unemployment benefits, safer working conditions, and the ability for unions to form and collectively bargain for their wages and working conditions. Some key pieces of legislation that enacted important labor benefits were the National Labor Relations Act of 1935, the Fair Labor Standards Act of 1938, and the Walsh-Healey Act of 1936.

Question 2

Government and Labor - National Labor Relations Act of 1935

Answer 2

The National Labor Relations Act of 1935 (also known as the Wagner Act after New York Senator Robert F. Wagner) is a foundational statute of United States labor law which guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action including strike if necessary. The act also created the National Labor Relations Board, which conducts elections that can expect employers to engage in collective bargaining with labor unions (also known as trade unions). The Act does not apply to workers who are covered by the Railway Labor Act, agricultural employees, domestic employees, supervisors, federal, state or local government workers, independent contractors, and some close relatives of individual employers.

Question 3

Government and Labor - The Walsh–Healey Public Contracts Act of 1936

Answer 3

The Walsh–Healey Public Contracts Act of 1936 is a US labor law, passed as part of the New Deal. It is a US federal law on basic labor rights for US government contracts. It was intended to improve labor standards. The Walsh-Healey Act that applies to U.S. government contracts exceeding $10,000 for the manufacturing or furnishing of goods. Walsh-Healey establishes overtime pay for hours worked by contractor employees in excess of 40 hours per week, and sets the minimum wage equal to the prevailing wage as determined by the Secretary of Labor. The law prohibits the employment of youths less than 16 years of age and convicts (only those currently in prison), except under certain conditions. The Act sets standards for the use of convict labor, and job health and safety standards. The Walsh-Healey Act does not apply to commercial items.

Question 4

Government and Labor - The Fair Labor Standards Act of 1938

Answer 4

The Fair Labor Standards Act of 1938 (abbreviated as FLSA) is a United States labor law that creates the right to a minimum wage, and “time-and-a-half” overtime pay when people work over forty hours a week. It also prohibited most employment of minors in “oppressive child labor”. It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage.

Question 5

Ways the Government Promotes Agriculture

Answer 5

Agriculture is another economic sector that depends substantially on the government’s help, particularly in the form of programs that provide subsidies and price controls (Price Ceilings and Floors). In the long run, the income of many primary producers has fallen because the global supply of food has risen. This is the result of a greater use of new technology and better crop yields, and because of new entrants into the global marketplace, such as the entry of Vietnam into the coffee market.

Question 6

Government and Agriculture - Guaranteed Price (aka: Price Floor)

Answer 6

One way that the government protects agricultural interests is price control in the form of guaranteeing a price to producers in order to stabilize prices and income. A guaranteed price is a price that a government or authority commits to paying, irrespective of the output produced. However, this method is often criticized because it encourages over-production and inefficiency, and as a result, the government is often forced to purchase the resulting surplus. After all, why would farmers bother to be efficient if they are guaranteed a buyer? Guaranteed pricing can also lead to extra costs for storage or disposal.

Question 7

Government and Agriculture - Price Floor

Answer 7

Government support for farmers comes in the form of a price floor, or a minimum amount that a product could be sold for. Price floors are minimum prices set by the government for certain commodities and services that it believes are being sold in an unfair market with too low of a price, and thus, their producers deserve some assistance. However, some countries may retaliate by imposing high tariffs, or import taxes, on those goods if they disagree with the price that the floor was set at.

Question 8

National Security

Answer 8

National security is the protection of a country from attack or other international threats through the use of military and nonmilitary means. National security covers a broad range of threats and includes military, economic, energy, environmental, and political threats.

Question 9

National Security Policy

Answer 9

National security policy is the overall strategy a government takes to advance national security and the course of action it pursues to accomplish the strategy.

Question 10

trade war

Answer 10

A trade war is a conflict between two or more countries regarding tariffs and other trade barriers erected against each other to protect their respective domestic industries.

Question 11

trade sanction

Answer 11

A trade sanction is a penalty that one or more countries imposes on another country in response to unwanted behavior that may reduce trade or even cut it off.

Question 12

trade embargo

Answer 12

An embargo occurs when one or more countries completely cuts off trade with another country.

Question 13

Economics - Regulation

Answer 13

Regulation consists of rules identifying permissible and impermissible activity on the part of individuals, firms, or government agencies.

Question 14

Economics - Social Regulation

Answer 14

Social Regulations are aimed at restricting behaviors that directly threaten public health, safety welfare, or well being.

Question 15

Economic Regulation

Answer 15

Economic regulation determines who gets to use the market and how it can be used.

Question 16

Economics - Deregulation

Answer 16

Deregulation is the reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Over the years, the struggle between proponents of regulation and proponents of no government intervention have shifted market conditions. Finance has historically been one of the most heavily scrutinized industries in the United States.

Question 17

Dodd-Frank Act

Answer 17

The Dodd-Frank Wall Street Reform and Consumer Protection Act is a massive piece of financial reform legislation passed by the Obama administration in 2010 as a response to the financial crisis of 2008. Named after sponsors U.S. Senator Christopher J. Dodd and U.S. Representative Barney Frank, the act’s numerous provisions, spelled out over roughly 2,300 pages, are being implemented over a period of several years and intended to decrease various risks in the U.S. financial system. The act established a number of new government agencies tasked with overseeing various components of the act and by extension various aspects of the banking system. President Donald Trump has pledged to repeal Dodd-Frank, and on May 22, 2018, the House of Representatives voted to roll back significant pieces of Dodd-Frank.

Question 18

Consumer Protection

Answer 18

Consumer protection refers to all of the laws and other forms of government regulation designed to protect the rights of consumers. These laws and regulations are administered by the Federal Trade Commission, or FTC.

Question 19

Economics - Consumerism

Answer 19

Consumerism is the theory that a country that consumes goods and services in large quantities will be better off economically. Sometimes, consumerism is referred to as a policy that promotes greed.

Question 20

Consumer Protection

Answer 20

Consumer protection refers to laws and other forms of government regulation designed to protect the rights of consumers.

Question 21

Consumer Protection - Federal Trade Commission

Answer 21

The Federal Trade Commission, or FTC, serves as the U.S.’s consumer protection agency and administers many different consumer protection laws, like the Telemarketing Sales Rule and the Equal Credit Opportunity Act. The FTC protects consumer rights by: (1) Enforcing product safety (2) Distributing consumer-related information (3) Preventing deceptive marketing.

Question 22

Consumer Protection - Federal Trade Commission - Explain how it protects consumer rights.

Answer 22

The FTC protects consumer rights by: (1) Enforcing product safety (2) Distributing consumer-related information (3) Preventing deceptive marketing.

Question 23

Consumer Rights

Answer 23

Generally accepted basic consumer rights are (1) Right to safety: Protection from hazardous goods. (2) Right to be informed: Availability of information required for weighing alternatives, and protection from false and misleading claims in advertising and labeling practices. (3) Right to choose: Availability of competing goods and services that offer alternatives in terms of price, quality, and service. (4) Right to be heard: Assurance that government will take full cognizance of the concerns of consumers, and will act with sympathy and dispatch through statutes and simple and expeditious administrative procedures.

Question 24

Product Liability

Answer 24

Product liability is the legal responsibility imposed on a business for the manufacturing or selling of defective goods. These laws vary state-to-state, but all seek to protect consumers by holding manufacturers and vendors responsible when things go wrong with their products. This is accomplished through three main types of product liability: (1) Design flaws (2) Manufacturing defects (3) Failure to warn consumers of a possible danger.

Question 25

Tort Law

Answer 25

Tort law is the area of the law that covers most civil suits. Generally, every claim that arises in civil court, with the exception of contractual disputes, falls under tort law. The concept of this area of law is to redress a wrong done to a person and provide relief from the wrongful acts of others, usually by awarding monetary damages as compensation. The original intent of tort is to provide full compensation for proved harms. Lawsuits involving contracts fall under contract law.

Question 26

Product Liability - Strict Liability Standard

Answer 26

Strict liability standard means that a manufacturer will be held liable if the manufacturer’s defective product causes injury, regardless of fault.

Question 27

Natural Capital

Answer 27

Natural capital is defined as the land, air, water, living organisms, and natural resources of the earth that produce value to people. Nature has many economically important assets, including mineral deposits, energy resources, farm land, forest timbers, and fisheries. Other components that have economic value but are harder to recognize include air and water filtration, flood protection, and maintenance of biodiversity.

Question 28

Hidden Natural Capital

Answer 28

These components are harder to see than standard Natural Capital and therefore not as easy to assess in terms of economic value. They include air and water filtration, flood protection, and maintenance of biodiversity.

Question 29

Hidden Natural Capital - Carbon Sink

Answer 29

A carbon sink is a forest, ocean, or other natural environment viewed in terms of its ability to absorb carbon dioxide from the atmosphere.

Question 30

Natural Resources - Nonrenewable Resources

Answer 30

A nonrenewable resource is a resource of economic value that cannot be readily replaced by natural means on a level equal to its consumption. Most fossil fuels, such as oil, natural gas, and coal are considered nonrenewable resources in that their use is not sustainable because their formation takes billions of years.

Question 31

Natural Resources - Renewable Resources

Answer 31

A renewable resource is a substance of economic value that can be replaced or replenished in the same or less amount of time as it takes to draw the supply down. Some renewable resources have essentially an endless supply, such as solar energy, wind energy, and geothermal pressure, while other resources are considered renewable even though some time or effort must go into their renewal, such as wood, oxygen, leather, and fish. Most precious metals are considered renewable as well; even though they are not naturally replaced, they can be recycled because they are not destroyed during their extraction and use.

Question 32

Economics - Land

Answer 32

Land is real estate or property, minus buildings and equipment, that is designated by fixed spatial boundaries. Land ownership may offer the title holder the right to natural resources on the land. The traditional school of economics dictates that land is a factor of production, along with capital and labor. The sale of land results in capital gain or loss; under IRS tax laws, land is not a depreciable asset.

Question 33

Explain how land can be repurposed.

Answer 33

Adding stories to buildings or innovating with smaller requirements for land, such as learning economics from your phone instead of in a lecture hall. Not all improvements are necessarily for the best, such as the Chernobyl incident in 1986, which poisoned large portions of valuable farmland.

Question 34

Explain how land can be can be inelastic in supply and can be considered a commodity that is rented, not consumed.

Answer 34

If the supply changes little with a change in price, then supplies are considered inelastic. For instance, the supply of land is generally inelastic, because it is not making any more of the stuff. Land is “rented” because no-one can really control it forever.