U-102C: Political Economy
Midterm Exam #2 Version 1
Instructions: This is a closed-book, in-class examination. You will have the
entire class period in which to work. Pick the one best
answer to each of the following test items and record your answers by
blackening the appropriate bubbles next to the corresponding item numbers on
a large blue Scan Sheet. Be sure that you both print your name on the answer
sheet (last name first) and also blacken the appropriate bubbles in the
columns below the letters. Please also write your signature on the space
marked for that purpose on the Scan Sheet. All students should write in their
student I.D. numbers in the Identification field (items A through I), but
only those students willing to have their exam scores and grade computations
publicly posted by their I.D. number should blacken the dots that will make
the I.D. number machine-readable. Blackening the dots for the I.D. number
constitutes permission to post this information.
1. According to the political philosophy enshrined in the Declaration of
Independence, the primary purpose of government is
2. Which of the following is not among the economic policy-
relevant powers explicitly assigned by the Constitution to the Congress?
- a. to protect the individual's rights to pursue his private ends free
from undue interference by others.
- b. to subordinate the selfish desires of the individual to the interests
and well-being of the majority.
- c. to organize economic production and distribution on the basis of
equality and social justice.
- d. to instill sound moral principles in all the members of society.
3. Which of the following are not protections for economic
freedom and private property rights embedded in the U.S. Constitution?
- a. to borrow money on the credit of the United States.
- b. to establish the legal requirements and procedures for bankruptcy.
- c. to issue money and regulate its value.
- d. to levy taxes on the treasuries of the several states.
4. In "The Federalist #10," James Madison argues that
- a. Private property may not be taken for public use without just
- b. No state may pass any law impairing the obligation of contracts.
- c. No soldier may, in time of peace, be quartered in any house without
the consent of the owner.
- d. Congress shall have power to regulate commerce with foreign nations
and among the several states.
5. An assumption that is common to both James Madison's arguments in the
Federalist and Adam Smith's argument in the excerpt from The Wealth
of Nations in your xeroxed readings collection is
- a. free popular government in a large and diverse state is likely to
prove more stable and durable than in a small state.
- b. free popular government in a small state is likely to prove more
stable and durable than in a large state.
- c. free popular government in a large and diverse state will be possible
only if the self-seeking activities of political factions are repressed or
else avoided by teaching the people civic virtue.
- d. free popular government in a small state would be the best and most
stable form of government except for the fact that such states are easy prey
for hostile foreign powers.
6. According to your "Glossary of Political Economy Terms," the class of
ideologies that typically strive to show that existing political or economic
inequalities within society are justified and that the existing order is as
close as practically attainable to an ideal order is
- a. the public welfare is most reliably to be secured by trying to put the
few truly virtuous, altruistic, public-spirited people in power and then
relying upon their disinterested and systematic planning to secure the
- b. most people, most of the time may be expected to act primarily on the
basis of their own self-interest rather than the public's interest --
including public officials.
- c. because people in general are basically good, democratic government
institutions can be relied upon to produce policies for the public good.
- d. the division of labor and individual specialization in distinct
occupations that come with the growth of commerce and industrialism are bad
things on balance and should be combatted because they undermine the unity of
outlook of the people in a community.
7. According to the classification of American political ideologies offered
in Maddox and Lilie's "The Roots of Contemporary Ideologies" (and applied in
the "What's Your Ideology?" lab exercise), a person whose political beliefs
supported both (1) a low degree of government intervention
or control in the economy and also (2) a high degree of
government intervention to enforce traditional or conventional values in the
area of personal behavior, would be classified as
- a. populist ideologies.
- b. liberal ideologies.
- c. conservative ideologies.
- d. libertarian ideologies.
8. According to the results of the lab questionnaire on U-102 students'
attitudes toward personal and economic freedoms presented in Professor
Johnson's lecture on American ideologies, the largest
fraction of U-102 students were classified as
- a. a liberal.
- b. a conservative.
- c. a populist.
- d. a libertarian.
9. According to the analysis of 14 1991-1992 roll-call votes in the U.S.
House of Representatives (102nd Congress) presented in lecture, the
smallest proportion of the House membership consisted of
Representatives whose voting records classified them as
- a. liberal.
- b. conservative.
- c. populist.
- d. libertarian.
- e. centrist/divided/inattentive.
10. According to Professor Johnson's lecture on elections as a means for
popular control over government policy, the argument that constituents exert
substantial control over their representatives' votes in Congress by
rewarding or punishing incumbents at the polls
- a. conservatives.
- b. libertarians.
- c. populists.
- d. liberals.
11. The common practice in which two (or more) legislators each agree to
trade away a vote on a bill about which they care little in exchange for the
other's vote on a bill much more important to them is called
- a. is strongly supported by all available evidence.
- b. is greatly weakened by the finding that only about 10% of the public
can both recognize the name of the incumbent and recall even one of his votes
- c. is greatly weakened by the finding that the best predictor of voter
choices at election time is the voter's party identification.
- d. is greatly weakened by the finding that voters are considerably better
able to identify their representative's general ideology than his stands on
particular pieces of legislation.
12. Of the roughly 20,000 bills introduced in Congress every session, about
what proportion are ever called up for a floor vote by the full membership of
the House of Representatives or Senate?
- a. barn-burning.
- b. logrolling.
- c. free riding.
- d. bribery.
- e. mopery
13. The chairmen of the standing committees in the US Senate and the House of
- a. 90% or more.
- b. about 67%.
- c. about 50%.
- d. 10% or fewer.
14. Which of the following is not normally an important
influence on the committee assignments that a re-elected member of the U.S.
House of Representatives receives at the beginning of each two-year term of
- a. are all senior members of the political party having a majority in the
- b. are selected by the President from the members of his own party.
- c. are automatically the members of the committee with the longest
continuous service on the committee, regardless of party affiliation.
- d. choose all the members of their respective committees, regardless of
political party affiliation.
15. Which of the following is not true of bills in the U.S.
- a. the member's committee assignments in the previous session, if he
wants to stay there.
- b. the need to assure that the committee's make-up is representative of
the entire country, and not just of constituencies having a special interest
in the legislation to be considered.
- c. the availability of a vacant "slot" on the committee for someone of
the member's party, if he is seeking appointment to a different committee
- d. the member's seniority, compared to other members of his party.
16. Important sources of influence by American political parties' national
leaders over the way their party's delegations in Congress vote on
controversial bills include
- a. Bills become law if they are passed in identical form by both chambers
of Congress and are signed by the President.
- b. If the committee to which it has been referred decides not to make a
recommendation to the full chamber for or against a bill, for all practical
purposes, the bill is dead and will not be voted on.
- c. Bills introduced by a member of the House of Representatives may be
approved or disapproved by the appropriate committees, but they may not be
changed by the committee on its own authority.
- d. Only the House of Representatives may initiate a bill providing for
the levying of new or higher taxes, although the Senate may amend it after
the House passes it.
17. As has been the case for almost the entire period since World War II, the
Republicans are currently
- a. power to deny the party's nomination for reelection to uncooperative
members of the Congress.
- b. power to control the amount of money available for members' re-
- c. power to remove occasionally uncooperative members from the standing
committees on which they have acquired valuable seniority.
- d. none of the above.
18. When the President refuses to sign a bill passed in identical form by
both houses of Congress and instead returns it to Congress with the reasons
for his refusal, this is referred to as
- a. the majority party in the House of Representatives and the Senate.
- b. the majority party in the House of Representatives and the minority
party in the Senate.
- c. the minority party in the House of Representatives and the majority
party in the Senate.
- d. the minority party in the House of Representatives and the Senate.
19. A bill in Congress that (if passed and signed into law) makes it legal
for a Federal agency to spend money from the Treasury for some specified
- a. a veto.
- b. a bill of attainder.
- c. an ex post facto law.
- d. a constitutional crisis.
20. The executive agency that is primarily responsible for examining the
funding requests of the various executive branch departments and then putting
together the President's spending recommendations to Congress every year is
- a. a bill of attainder.
- b. an appropriation bill.
- c. a private bill.
- d. an authorization bill.
21. Which of the following represents "regulatory policy"?
- a. the General Accounting Office.
- b. the President's Council of Economic Advisers.
- c. the Office of Management and Budget.
- d. the Budget Committees of the House and Senate.
- e. the Joint Economic Committee.
22. According to Professor Johnson's lecture, which of the following
circumstances improves the chances for a U.S. President to be successful in
getting his legislative program through Congress?
- a. manipulating the size of the budget deficit.
- b. manipulating the rate of growth of the money stock.
- c. establishing rules to fix the prices particular industries may charge
for their products.
- d. none of the above.
23. Use statements 1 and 2 to determine the best answer below:
- a. when his political party controls one or both houses of Congress.
- b. when presidential popularity with the general public is high.
- c. when he limits his most vigorous efforts to promoting only his highest
- d. all of the above.
- According to Anthony Downs' "Economic Theory of Democracy," the tendency
of party platforms in a two-party democracy is to converge toward each other,
with both parties ending up relatively close to the ideological center of
gravity of the voting public.
- According to Anthony Downs' "Economic Theory of Democracy," one may
predict that the policies of a democratic government will usually be biased
in favor of consumer interests over producer interests, because the consumers
of any given product or class of products being regulated usually greatly
outnumber its producers.
24. In his lecture on interest groups, Professor Johnson argued that the most
important reason why many important interests in the U.S. do not get
represented by organized pressure groups is
- a. Both 1 and 2 above are true.
- b. 1 is true and 2 is false.
- c. 1 is false and 2 is true.
- d. Both 1 and 2 above are false.
25. Which of the following is not one of the arguments made
by Prewitt and Verba in support of their claim that there are important
differences between the Democratic and Republican parties?
- a. the "free rider" problem in financing pressure group activities.
- b. legal restrictions on interest group formation.
- c. the disproportionally high costs of organizing very small social
- d. the preoccupation of many associations with providing private benefits
that can be restricted only to dues-paying members.
26. According to Benjamin Ginsberg's article "Money and Power: The New
Political Economy of American Elections," the newest developments in election
campaign technology, such as public opinion polling, TV advertising, phone
banks, direct mail advertising and fund-raising, and the techniques of
professional public relations management,
- a. the two parties tend to draw their voters from different social groups
with different political interests.
- b. candidates of the two parties tend to get their campaign contributions
from different interest groups.
- c. members of the two parties tend to vote very differently on social
welfare and economic intervention issues in Congress.
- d. Presidents elected by the two parties have pursued very different
foreign policy objectives.
27. The acronym "PAC" stands for
- a. have increased the advantages of liberal or left-wing political
forces, who traditionally have had larger but less disciplined political
- b. have increased the advantages enjoyed by right-wing or conservative
political forces, who always have had access to more money with which to run
their campaigns and can better afford the expensive new techniques.
- c. have sharpened the disadvantages suffered by moderate or centrist
political forces because of the greater difficulty of articulating their more
complex political views in 15-second sound-bites.
- d. All of the above are correct.
28. According to Fred Wertheimer's essay arguing that PACs undermine
democracy, by far the largest proportion of campaign contributions made by
PACs in Congressional races
- a. peace action council
- b. political activists' club.
- c. political action committee.
- d. party advertising council.
29. The most numerous, well-funded and influential category of pressure
groups in contemporary American politics was said by Professor Johnson to be
- a. goes to incumbent Congressmen standing for re-election.
- b. goes to right-wing Republican challengers running against incumbent
- c. goes to left-wing Democrat challengers running against incumbent
- d. goes to candidates who ultimately lose the election.
30. A device for assembling the individual claims for relatively small
damages to a large number of similarly situated people so that they can be
filed as a single lawsuit is
- a. broad multi-issue ideologically-based organizations.
- b. ethnic/racial-based organizations.
- c. consumer-advocacy organizations.
- d. economically-based "occupational" organizations.
- e. single-issue ideologically based organizations.
31. Under the new budget procedures established by the 1985 Gramm-Rudman Act,
when Congress passes appropriations in amounts whose totals exceed the
spending limits Congress supposedly established for itself in its April
Budget Resolution, the President is required to issue an Executive Order that
reduces spending authority according to a fixed formula for across the board
percentage reductions from the various non-exempted Federal departments and
programs in order to "take back" the excess amount of money appropriated.
Such a Presidential action is called
- a. an amicus curiae brief
- b. a class action suit
- c. a test case
- d. a PAC.
32. Use statements 1 and 2 below to determine the correct answer, based on
Kathleen Kemp's article "Industrial Structure, Party Competition, and the
Sources of Regulation."
- a. backdoor spending.
- b. Presidential immolation.
- c. discretionary impoundment.
- d. sequestration.
- Usually the Presidency will support greater political protection of the
interests of large corporations (especially those operating in world wide
markets and those seen as most crucial to the national economy), while the
Congress (and especially the House of Representatives) will normally show
greater favoritism for the interests of small business.
- In general, the economically dominant corporation or corporations within
a regulated industry (the "ins") tend(s) to be relatively advantaged over
their competitors or potential competitors by the existing regulatory laws
and policies affecting their industry and tend(s) to support the dominant
political party. The more disadvantaged corporations within a regulated
industry (the "outs") tend to seek regulatory policy changes favorable to
their interests by means of political support of the minority party.
33. Use statements 1 and 2 below to determine the correct answer.
- a. Both 1 and 2 above are true.
- b. 1 is true and 2 is false.
- c. 1 is false and 2 is true.
- d. Both 1 and 2 above are false.
- Recent studies investigating the relationship between the degree of
political independence of a country's monetary policy makers from control by
elected politicians and the long term rate of inflation in the country's
economy have amassed evidence that, in general, the greater the monetary
policy makers degree of independence from the politicians, the higher the
rates of inflation.
- Compared with the monetary authorities in most other advanced industrial
countries, the United States Federal Reserve system is very highly controlled
by elected politicians.
34. Which of the following is not one of the Federal Reserve
Board's major tools for regulating the rate of growth of the money supply?
- a. Both I and II above are true.
- b. I is true and II is false.
- c. I is false and II is true.
- d. Both I and II above are false.
- a. setting reserve requirements for commercial banks.
- b. setting the discount rate.
- c. buying and selling U.S. government bonds and notes on the open market.
- d. setting quotas for the amounts of loans each commercial bank must
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