- (5 Points) One of the reasons for government regulation is to prevent or
mitigate market failures. Define the term market failure and provide an
- (10 Points) Define each of these four terms and describe the key differences
between each: private goods, toll goods, common pool resources, and public
- (5 Points) In the U.S. Federal Budget, it is key to understand the difference
between what is mandatory spending and what is discretionary spending.
Identify for each of the following if they are mandatory or discretionary
a. Environmental Protection Agency
b. Social Security
c. Department of Transportation
d. National Parks
e. National Defense
g. Interest paid on the national debt
h. Department of Homeland Security
j. Internal Revenue Service
- (5 Point) The four phases in the federal budget cycle are: preparation,
consideration, execution, and audit/evaluation. Define and describe briefly
what happens in each of these phases.
- (10 Points) During the great recession, the Obama Administration signed into
law a temporary cut in payroll taxes. Last year, with the COVID-19 recession,
there was some discussion of a similar payroll tax cut within the Trump
Administration. Who receives the financial benefit from a payroll tax cut?
Why did legislators opt for other forms of economic stimulus instead of a
payroll tax cut in the face of the COVID-19 recession? Finally, when you cut
taxes you cut government revenues, what part of the Federal Government’s
budget is impacted by a payroll tax cut and what are the long-term
consequences of this lost revenue?
- (5 Points) What is a line-item veto? Why do many state Governors have the
power of a line-item veto, but the President of the United States does not?
- (5 Points) What is a rainy-day fund and how do states utilize rainy-day funds
to help stabilize their budgets across multiple budget years?
- (5 Points) Quick answer questions regarding state budgets:
a. Name one state that does not require a balanced budget.
b. Name one state that does not have a sales tax.
c. Name one state that does not have an income tax.
d. Name one state that does not have a rainy-day fund.
e. Name one state that does not have a line-item veto.
- (5 Point) Discuss at least two ways the U.S. Federal Government redistributes
income/earnings from one party to another party.
10.(10 Points) When an individual receives a monetary benefit/payment from
the U.S. Federal Government, this benefit generally falls into one of two
categories: means-tested and non-means-tested. Define these two terms and
describe the key difference between each.
11.(10 Points) Define and discuss the differences between monetary policy and
fiscal policy and what organization(s) in the United States oversee each?
12.(10 Points) What is the Federal Reserve? Is it a public or a private entity?
Who is the current Chair of the Federal Reserve? What policy action did the
Federal Reserve take at their most recent policy meeting?
13.(5 Points) Why does the Federal Reserve require its member banks to always
keep a portion of their deposits in reserve (i.e. keep it as cash) rather than
loan out all deposits held within the bank?
14.(5 Points) Describe the monetary policy actions the Federal Reserve might
undertake to combat high unemployment.
15.(5 Points) Describe the monetary policy actions the Federal Reserve might
undertake to combat high inflation
Type of assignment: Essay