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Political Science Exam 2 Review

Political Science Exam 2 Review - Political Science 2320...

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Political Science 2320- Arnold  Exam 2: Review  Review Guide for Test #2 in Functions of American Government The exam will have 50 multiple choice and true/false questions. Please note that this study guide is not exhaustive; however, it should be a very good beginning point for you in studying for the exam. Which party tends to favor spending cuts as a method of budgetary control?  Republicans  Spending increases?  Democrats  Tax increases?  Democrats  Tax cuts? Republicans  Why in the late 1990s did the United States experience budget surpluses?  Mild tax increases, spending cuts, and burgeoning tax revenue.  What is the difference between classical economic theory, Keynesian economic theory,  supply-side economics, and monetary economics? Classical Theory:      the market as a self-adjusting mechanism.  Laissez Fair/ no government involvements.  Adam Smith  Keynesian Economic Theory:      The creation of demand through spending and  lowering taxes (creation of deficits to get out of recession).  Government should play a bigger role.  If you get in a spiral, you cannot adjust yourself.  Created a demand through spending and lowering taxes. Increased deficits.  Supply-side Economics:      Tax incentives, tax cuts, and reduced governmental  spending to allow for greater productivity and investment (trickle-down  economics)  1980  Allows for greater productivity  Monetary Economics:      fine-tuning the economy through regulation of the money  supply.  You can control the money supply by increasing or decreasing the size of interest  rates.  More borrowing puts more money into circulation.  Who is Adam Smith? Wrote the Wealth of Nations in 1776 which limited governments role  1
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Political Science 2320- Arnold  Exam 2: Review  Who is the current chairman of the Fed? Ben Bernake  What was TARP?   $800 billion dollar legislation to bailout financial institutions  What role did Federal Reserve, Fannie Mae, and Freddie Mac play in the financial/housing  crisis in 2008? What is the largest source of federal revenue? (2010)  42% Individual Income Taxes  40% Social Payroll Taxes  9% Corporate Income Tax  3%Excise Tax  6% Other Receipts  Which tax is the largest for most American taxpayers? Social Security tax, due to the way it is structured. It is taxed at the same rate up  to $106,000.  The top 50% of all taxpayers pay ____ of what the government takes in with regards to  the income tax.
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Political Science Exam 2 Review - Political Science 2320...

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