Knowing about Public Economy

1. President ____________________ famously said in his 1863 Gettysburg Address, democratic governments are supposed to be “of the people, by the people, and for the people.”

a. John. F. Kennedy

b. Abraham Lincoln

c. Lyndon Johnson

2. Just as markets can face issues and problems that lead to undesirable outcomes, a democratic system of government can also make mistakes, either by enacting policies that do not benefit society as a whole or by failing to enact policies that would have benefited society as a whole. True or False.

a. True

b. False

3. Some practical difficulties of democracy from an economic point of view include:

a. The actors in the political system are presumed to follow their own self-interest, which is not necessarily the same as the public good.

b. Benefits or costs of government action are sometimes concentrated on small groups, which in some cases may organize and have a disproportionately large impact on politics and in other cases may fail to organize and end up neglected.

c. A legislator who worries about support from voters in his or her district may focus on spending projects specific to the district without sufficient concern for whether this spending is in the interest of the nation.

d. All of the above

4. Why do people not vote? 

a. Perhaps they do not care too much about who wins.

b. They are uninformed about who is running.

c. They do not believe their vote will matter.

c. All of the above

5. The ____________________________ holds that people will not vote if the costs of becoming informed and voting are too high, or they feel their vote will not be decisive in the election.

a. theory of rational observance

b. theory of rational ignorance

c. theory of herd behavior

6. Which of these is a defining characteristic of democracy?

7. A form of democracy in which citizens elect representatives to make governing decisions on their behalf is called:

a. Liberal democracy

b. Social democracy

c. Representative democracy

8. In 2002, Congress passed and President George W. Bush signed into law the Bipartisan Campaign Reform Act (BCRA). The act strengthened the rules requiring full and speedy disclosure of who contributes money to campaigns. True or False.

a. True

b. False

9. While many U.S. adults do not bother to vote in presidential elections, more than half do. What motivates them? 

a. people who are more settled or more “connected” to society tend to vote more frequently.

b. Those with a job vote more than the unemployed.

c. Those who have lived longer in a neighborhood are more likely to vote than newcomers.

d. all of these are correct

10. A number of proposals have been offered to encourage greater voter turnout. These include:

a. making it easier to register to vote

b. keeping the polls open for more hours

c. even moving Election Day to the weekend

d. all of the above

11. Many people worry that politicians spend too much time raising money and end up entangled with special interest groups that make major donations. True or False.

a. True

b. False

12. The basic outcome of democracy is:

a. political, social, and economic outcome

b. military outcome

c. restricted and limited welfare policies

d. elimination of poverty.

13. Whatever we believe about whether candidates and their parties spend too much or too little on elections, the U.S. Supreme Court has placed limits on how government can limit campaign spending. True or False.

a. True

b. False

14. Political money is regulated by the federal government according to the:

a. Campaign contribution Law

b. Federal Campaign Limits Law

c. Federal Election Campaign Act

d. Campaign and Election Act

15. The goal of campaign finance law is to:

a. promote freedom of speech.

b. limit influence over public officials.

c. promote fairness.

d. create equality in funding.