In 2010, Two Members of Congress Held a Colorful Press

question 77

Multiple Choice

In 2010, two members of Congress held a colorful press conference, with goats in tow, to announce their intention to try to end federal mohair (a fabric made from goat hair) subsidies.These subsidies, long the target of presidents and members of Congress from both parties, dated from the mid-1950s, when Congress decided to support mohair production as a precaution against wool shortages.The subsidies were cut in 1995, but reemerged a few years later.The efforts of Chaffetz and Weiner to end the estimated $750,000 in subsidies, meanwhile, failed. Why might programs such as the mohair subsidy be so difficult to end?

• A) Most longtime programs, no matter how small, have broad support from the American people.
• B) Clientele agencies lobby for their survival, on behalf of the people and industries they serve-such as, in this case, the Department of Agriculture, on mohair producers' behalf.
• C) The few who benefit from a program will intensely fight elimination, or fight to reinstate cut programs, while most taxpayers would be unlikely to care, being largely unaffected.
• D) Congress prefers an incremental approach to cutting government services, even relatively small ones.

---

Definitions:

Tariffs

Taxes or duties imposed on imported goods to make them more expensive compared to domestic goods, often used to protect local industries.

Trade Balance

The difference in value between a country's imports and its exports; a surplus indicates more exports than imports, and a deficit the opposite.

Currency

The paper bills and coins in the hands of the public.

Open-Economy Macroeconomic Model

A framework used in economics to analyze and understand the behaviors and interactions of economies that engage in international trade and finance.