Test 3 Flashcards
(135 cards)
1
Q
Which of the following is the most accurate description of the US between 1880 and 1920?
A
The United States was the leading manufacturer in the world in terms of total production and output per worker.
2
Q
What is least accurate about marketing and selling in the US prior to the Civil War?
A
Most companies eliminated wholesalers to market products directly to their customers and save money.
3
Q
What is the most accurate statement about the fraction of the US population that lived in urban areas between 1800 and 1910?
A
The fraction of the US population that lived in urban areas grew steadily throughout the period.
4
Q
Which of the following is least accurate in characterizing changes in retailing in the second half of the 19th century?
A
Large growth in the number of “general stores.”
5
Q
What is least accurate about marketing and selling in the US after the Civil War?
A
There was a decrease in product differentiation—goods became more alike.
6
Q
What most accurately describes the U.S. compared to other nations in the early 1900s?
A
The U.S., Great Britain and Germany were the three most industrialized nations.
7
Q
Which is least accurate about foreign trade?
A
The most industrialized nations exported foodstuffs and raw materials to the least developed countries.
8
Q
What most accurately describes the US tariff policy between 1850 and 1910?
A
The US became more protectionist during the Civil War and the level of tariffs remained high into the beginning of the 20th century.
9
Q
What most accurately describes imperialism between 1870 and 1917?
A
The “Roosevelt Corollary” and the Monroe Doctrine were the primary documents that outline the US foreign policy.
10
Q
Advertising to differentiate your product most often occurs in what type of industry?
A
Industries with monopolistic competition.
11
Q
Which of the following is least accurate about the US during World War I?
A
Soldiers were obtained through volunteer army and without a draft.
12
Q
Which of the following is most accurate about the US during World War I?
A
The continent had experienced several major wars in the preceding decades.
13
Q
Which nation was not an ally of the United States during World War I?
A
Austria-Hungary
14
Q
Which of the following is the least accurate?
A
The financial center of the world shifted from New York before the war to London and Paris after the war.
15
Q
The U.S. financed WWI primarily by:
A
borrowing from the public.
16
Q
The best description of the economic ideology during World War I was __________.
A
The belief that the economy could be strengthened by centralized coordination.
17
Q
What most accurately describes what happened to earnings in the US between 1914 and 1920?
A
Both nominal and real earnings increased substantially.
18
Q
At the end of World War I, the ___________ outlined in broad terms the territorial adjustments that should occur in Europe, the extent of the reparations the losing nations owed, and the general association of nations that would guarantee each nation’s sovereignty in the future.
A
The Fourteen Points.
19
Q
All of the following are associated with the War Industries Board except
A
establishing and enforcing minimum wages for manufacturing workers.
20
Q
Food rationing during World War I under the wartime food administration featured
A
voluntary calls for “Meatless Mondays” and “Wheatless Wednesdays.”
21
Q
What best describes the impact of a price ceiling in a competitive market?
A
It will likely lead to consumers waiting in line for longer periods of time to buy the good.
22
Q
If a government wants to distribute the burden of increased spending onto future generations it should:
A
Borrow from the public.
23
Q
What best describes the reason for the large migration of African-Americans from the south to the north during the 1920s?
A
Employers in the North who had traditionally hired many immigrants had to search elsewhere when immigration restrictions were imposed.
24
Q
“Marriage bars”
A
- became more widespread in the 1920s
- forced female employees to leave work when they married.
25
Which of the following is most accurate about the 1920s?
The rapid increases in income reduced the use of credit.
26
Which of the following was not a major source of economic growth in the 1920s?
railroad construction
27
The 1920 census reported that ________ percent of Americans were urban dwellers.
more than 50
28
The ownership of radios increased from ___ percent in 1920 to ___ percent in 1930.
less than one; 40
29
During Prohibition the consumption of alcohol _____ and the crime rate _______.
fell;
Increased
30
During Prohibition overdose and accidental poisoning due to alcohol _____ and the variation in the quality of alcohol _______.
Increased;
Increased
31
In 1910, 8.6 percent of American 17-year olds were high school graduates. By 1938, this figure _____.
had risen to nearly 50 percent.
32
Union membership declined during the 1920s due to
- the growth of the service sector.
- increased use of high-tech, labor-saving devices in the manufacturing sector.
- firms’ use of "yellow-dog" contracts.
- poor union leadership.
33
Which of the following best describes trends in unionization and immigration in the 1920s?
Both decreased.
34
Which groups were least likely to support restrictions on immigration?
Employers
35
Which of the following pieces of agricultural legislation might be thought of as a solution to a problem that did not exist?
the Smoot-Hawley Tariff Act
36
In the 1920s, the Federal Reserve followed a policy of _____ because it believed that the insolvent banks ____.
Letting insolvent banks fail; were too small to be profitable and were badly managed.
37
During the stock market boom of the late 1920s stock prices ______.
rose faster than dividends.
38
The 1920s were characterized by large numbers of bank failures each year, especially among country banks. Country banks were particularly inclined to fail because
farm mortgages constituted the major portion of their loans.
39
Which of the following is most accurate?
Most economic historians believe rapid increase in inequality caused the Great Depression.
40
Investors should be willing to pay more for a stock when (controlling for all other things):
Future interest rates are expected to decrease.
41
Research by Warburton, and more recently Miron and Zweibel on alcohol consumption during and after prohibition indicates that
the demand for alcohol is fairly price inelastic.
42
During the Great Depression, real GDP decreased by roughly ____ percent and unemployment rose to roughly ____ percent.
30:
25
43
What is the best description of the US economy from 1929-1940?
The economy suffered an initial drop, a four-year expansion and then another drop towards the end of the decade.
44
The Stock Market Crash of 1929 probably contributed ____ to the Great Depression because _____.
a good deal;
consumer confidence and spending on durables were reduced.
45
At its maximum during the Great Depression unemployment reached approximately ___ percent of the labor force?
25
46
What best explains the pattern of bank collapses in the US?
The vast majority of banks closed early in the decade and the closing dropped significantly in the latter half of the decade.
47
During the Federal Bank Holiday ordered by President Roosevelt and the week that followed it,
- the banks were inspected.
| - actions were taken to take the US off the gold standard
48
During the 1930s,
- ordinary citizens were not allowed to hold gold.
- the US government fixed the price at which the Treasury would by and sell gold.
- production of gold soared
49
Britain’s departure from the gold standard in September 1931 ____ bank closures in the United States because ____.
increased, anyone who wanted gold had to withdraw it from U.S. banks.
50
According to Walton and Rockoff, which of the following was the most important in bringing the banking crises of the 1930s to an end?
the promise of federal bank deposit insurance.
51
Between 1929 and 1933, nominal interest rates ___, and real interest rates ___.
fell;
rose.
52
Andrea Schwatz has argued that the Great Depression was caused by
the fall in the stock of money.
53
One reason the Federal Reserve Board in Washington did not act as a lender of last resort during the early years of the Great Depression, was its power struggle with ____.
Federal Reserve Bank of New York.
54
Some have argued that the Federal Reserve looked at the wrong indicator of monetary policy, and that the Fed mistakenly thought that monetary policy was “easy” because ______.
market interest rates were low.
55
What best describes state fiscal experience in the late 1920s and early 1930s?
States either ran budget surpluses or fairly small deficits.
56
John Maynard Keynes attributed the “stickiness” of real wages in the early years of the depression to ______.
resistance by workers, especially unionized workers, to wage cuts.
57
According to the Keynesian interpretation of the 1930's, the main reason we still had double digit unemployment in 1939 was that
federal budget deficits were too small.
58
Which of the following “quotations”, according to chapter 23, best summarizes Keynes conclusions about the lessons of the depression for the nature of capitalism.
“It is in determining the volume, not the direction, of actual employment that the existing system has broken down.”
59
In regards to the uncommon length of the Great Depression, both Shumpter and Higgs contend that
private investment remained depressed in part due to the political climate created by the New Deal.
60
According to Fed Chairman Bernanke's analysis of the Depression-era financial system,
bank lending was often based on long-term relationships between banks and customers.
61
What is the most compelling evidence for the Keynesian interpretation of the Great Depression?
Decreases in both the interest rate and the quantity of money.
62
Which United States President is most closely identified with the Great Depression?
Herbert Hoover.
63
What most accurately describes the implementation of the New Deal?
It was implemented in two phases over the course of about eight years.
64
What was not one of the government’s strategies to pull the nation out of the Great Depression?
Large subsidies for manufacturing companies.
65
The text discusses unions in the context of the New Deal. It concludes that there was _____ in organized labor's relationship with government because _______.
an improvement; labor gained the right to strike and organize free of employer interference.
66
The National Recovery Act
- largely redistributed rather than expanded incomes.
| - was declared unconstitutional by the Supreme Court.
67
During the Great Depression, union membership _____ due to _____.
expanded;
the passage of pro-union legislation.
68
The New Deal policies both relieved distress and reformed the system to prevent future depressions. An example of the former is the ___ while the ___ is an example of the latter.
Civilian Conservation Corps;
Securities and Exchange Commission.
69
The Commodity Credit Corporation (CCC) instituted several policies to improve the welfare of farmers. Which of the following best describes the programs’ effects?
The CCC price supports inefficiently allocated resources, which decreased welfare.
70
What was not a significant cause of the Great Depression?
Large increase in imports that took jobs away from American workers.
71
Which were among the important reforms of the banking system that resulted from the financial crisis of the 1920 and 1930s?
- the Glass-Steagall Act
- the prohibition of interest payments on bank deposits
- the separation of commercial banking from investment banking
72
What is not one of the reasons why farmers prefer price supports more than direct income supplements?
Direct income supplements tend to provide lower benefits.
73
Which U.S. President was in office for most of World War II?
Franklin D. Roosevelt.
74
In 1940, civilian purchases of goods and services equaled roughly _____ of GDP; by 1943, this figure had changed to ________.
92 %
50%
75
Wartime economic mobilization resulted in
- increased hours for workers.
- dramatic increases in the industrial accident rate.
- some reduction in the quality of output.
- Increased production rates.
76
The draft is analogous to a tax, where the amount of the tax equals
the difference between what a soldier would need to be paid to serve voluntarily and his/her actual pay.
77
Forms of federal taxation used to finance the war effort did NOT include
sales tax
78
The wage and price controls of the 1940s eventually led to
- black markets.
- "forced uptrading."
- calls for nationalizing the nation's cattle herds.
79
Which of the following were NOT related to the price controls that existed during World War II?
Price ceilings created an excess demand of consumer durable goods.
80
What best describes real per capita GDP in the US between 1929 and 1959?
It grew the most during World War II.
81
Which of the following statements about labor unions and management during the 1940s is most accurate?
The real earnings of people in labor unions increased significantly during World War II.
82
Which of the following is most accurate about women’s involvement in the labor force?
Over half of the women who entered the labor force during World War II had dropped out by 1950.
83
During World War II, price supports for agriculture
were not generally needed because of high demand.
84
What best describes the changes in federal spending of the US economy from 1939 to 1949?
Between 1939 and 1944 military expenditures increased substantially and civilian-related expenditures remained about the same.
85
When an economy is at full employment, increases in military production
cause a movement along the PPF.
86
An economy producing at the wrong point on its production possibility frontier is ___.
inefficient, because the combination of goods and services produced is not what people want.
87
If supply is perfectly inelastic and demand increases,
price rises and output remains unchanged.
88
Transfer payments include
welfare benefits and Social Security payments.
89
Which of the following statements would MOST accurately describe government spending between 1970 and 2006?
State and local governments spend more on goods and services than the federal government, but the federal government spends more in total than state and local governments.
90
During the three decades immediately following World War II,
the prevailing liberal ideology led to the passage of legislation that increased Social Security benefits, created of Medicare, and increased the minimum wage.
91
The “Great Society” initiative led to the creation of
- Medicare.
- Rent subsidies for the poor.
- the Department of Transportation.
- the Department of Housing and Urban Development.
92
Between 1965 and 1972, eight major pieces of consumer-protection legislation were enacted. This burst of legislative activity was largely driven by
a general lack of faith in the market.
93
The passage of major pieces of consumer protection legislation in the postwar period
- was one of the most dramatic development of that period.
| - often were the result of highly visible public tragedies.
94
Features of “Reagonomics” include all of the following except:
regular increases in the minimum wage.
95
After 1960, all of the following declined except
the average acreage per U.S. farm.
96
All of the following changes characterize the postwar agricultural sector except
increasing numbers of tenant farms in the South.
97
Under the deficiency payments system, which was used to subsidize grain production,
farmers had a greater incentive to engage in beneficial crop rotation
98
Which most accurately describes The Farm Security and Rural Investment Act of 2002?
It continued the subsidies tied to farm prices that comprised the major share of transfers to farmers.
99
Market-oriented economists favor the use of _____ to solve the global warming problem.
- taxes on emissions
| - tradable rights
100
According to _________, liberal programs survive attempts by conservative administrations to eliminate them because of the “tyranny of the status quo.”
Milton and Rose Friedman
101
The Cold War, or "war on communism,"
- was the most expensive war of the twentieth century.
- is believed to have caused an increase in defense spending that came at the expense of private consumption rather than private investment.
102
According to William Niskanen’s model of bureaucracy, Congress tends to approve a bureau’s budget at a level where
the marginal cost of the last unit of the bureau’s output is greater than the marginal value.
103
A comparison of a traditional price support program and the Brannan plan shows that
the more elastic the supply and demand curves, the lower the relative cost of the Brannan plan will be.
104
In the 1960s and 1970s the U.S. passed several major consumer safety laws, including the Flammable Fabrics Act and the Child Protection Act. The economic impact of such legislation may include all of the following except:
reducing the price of the regulated product.
105
If the government-imposed price of corn is greater than the market price,
the quantity of corn supplied will exceed the quantity of corn demanded.
106
Federal support for road building into publicly owned commercial forests has caused
an increase in the supply of timber.
107
The primary area of growth in the modern U.S. economy is
the service sector.
108
In the last 20 years all of the following measures of the manufacturing sector have declined except
total manufacturing output
109
According to Joseph Schumpeter, the success of capitalism relies on
"gales of creative destruction."
110
Productivity
- increased slightly from 1970 to 1980.
- rose rapidly after World War II.
- is a fundamental determinant of real wages.
111
Explanations for the decline in U.S. productivity in the 1970s and 1980s include all of the following except:
a wave of corporate mergers that reduced competition
112
A conglomerate merger is a combination of
firms that produce unrelated products or services.
113
Response to the energy crisis of the early 1970s did not include
gasoline "rationing by price."
114
Ling-Temco-Voight (LTV) is an example of
a conglomerate
115
The largest merger in American history was that of
America Online and Time Warner in 2000.
116
Leverage refers to a firm’s
debt to equity ratio.
117
In the 1970s, members of the Law and Economics program at the University of Chicago argued that
large market shares may be due to efficient management or innovation.
118
From the late 1930s until the early 1970s, courts tended to follow per se rules when deciding antitrust cases. According to these rules,
a firm’s control of a large market share was considered intrinsically illegal.
119
Key features of the American labor market in the postwar period include all of the following except
steadily increasing union membership.
120
In 2001, the percent of total employment in the manufacturing, mining, and construction sector equaled
less than 20 percent
121
In 2001, the labor force participation rate of married women equaled ________.
just over 60 percent.
122
According to the text, which of the following factors contributed to the increased labor force participation rate of women during the postwar period?
- rising real wages
- an increase in the years of schooling completed by women
- declining fertility rates
- the growth of the service sector
123
All of the following served to reduce labor market discrimination against women and minorities except
marriage bans.
124
Relative to the white median family income, since 1980 African-American median family income has ________ and Hispanic median family income has __________.
risen;
remained about the same
125
Which of the following statements about the percent of the population completing high school by persons age 25 and over in 2000 is MOST accurate?
African Americans graduate at a rate about 10 percentage points less than whites, and Hispanics graduate at a rate about 30 percentage points less than whites
126
By 1964, nearly all blacks outside the South were covered by laws that allowed the government to issue cease and desist orders against discriminating firms. According to recent research by William Collins, these laws
had some success in improving the wages and working conditions of African-American women.
127
New immigration laws championed by the Kennedy and Johnson administrations
placed a high priority on uniting families
128
Which of the following statements is most accurate about immigration in the 20th century?
The number of immigrants decreased from 1900 until the Great Depression, increased consistently between 1940 and 2000, and is now about the same as it was in 1900.
129
All of the following have played a role in reducing union strength since 1970 except
the Supreme Court’s decision to apply antitrust laws to union organization efforts.
130
Americans who benefit from immigration include
- firms that hire immigrants.
- workers whose skills are complementary with immigrants’ skills.
- consumers who purchase goods produced using immigrants labor.
- property owners who own land in immigrant neighborhoods.
131
The term “path dependence” refers to
inefficient outcomes that result from early technology choices that are not optimal in the long run.
132
According to economic theory, the real wage should
equal the marginal physical product of labor.
133
The introduction of computer-based technologies in the telephone industry caused
an increase in the supply of telephone services.
134
Measured in BTUs per dollar of real GDP, energy consumption fell by only 5 percent between 1970 and 1975, but had fallen by almost 30 percent by 1990. These figures illustrate the fact that
energy demand is more elastic in the long run than in the short run.
135
During the postwar period, increased real wages for women led to an increase in the labor force participation rate for women. This implies that, for women,
the substitution effect of a wage increase is greater than the income effect.
