Ames and Rosenberg (1963) argue that demand for manufactured goods in the U.S.
tended to be utilitarian in nature rather than “high quality,” and this encouraged
development of mass production methods.
During the era from 1880 to 1920, the U.S. economy experienced a rise in big business,
an expansion in industry and increased concentration in both.
For the first time in U.S. history, the federal government assumed responsibility for
managing unemployment during the Great Depression.
Under the Marshall Plan (1948″51), the U.S. granted resources to and transfused U.S.
dollars into European countries devastated by World War II. In return, the U.S.
requested coordinated plans of European recovery that promoted efficient and effective
production in private markets with minimal government interference.
The immigration rates of the 20th century returned to the high rates of the 19th century.
Under the Articles of Confederation, the Continental Congress permitted each state to
issue paper money and borrow on their own to finance expenses related to the American
Revolution.
The U.S. lowered tariffs in the 1850s because of a budget surplus.
The assembly line and interchangeable parts were first used by Henry Ford.
The post-World War II prosperity (1945″1949) was due in large part to Harry Truman’s
commitment to maintaining high levels of federal expenditures after World War II
(1941″45).
The Capper-Volstead Act of 1922 applied the Sherman Anti-Trust Act to farm
cooperatives, preventing them from restricting output and fixing prices.
During the antebellum period, the majority of the family labor on farms was devoted to
investment type of activitiesclearing land, constructing fences and buildings, and
feeding and breeding livestock.
The children of indentured females were not the property of the master or owner of the
indentured servant. This was an important difference between indentured servants and
slaves.
The transformation in labor has dramatically impacted the distribution of income in the
U.S.
The loss of total market share of steel in the world market for steel can be blamed on
steel producers’ decisions to not adopt the latest steel technology. The producers in other
countries that adopted it gained market share at the expense of the U.S.
In 1921, prices surged, causing a decrease in average real wages.
During the antebellum period, factories grew, in part, due to internal economies of
scale.
Internal improvements are important to a developing and growing economy.
The techniques of government regulation in the U.S. are intended to increase the degree
of competitiveness in the domestic and international marketplaces.
Moore (1959) finds evidence to suggest that the mild cyclical deviations in employment
and output of the Korean War were caused by progressive income taxes and
unemployment compensation.
American manufacturers rapidly dropped waterwheels when the steam engine was
introduced.
In the 1970s, the relationship between stock-market prices and the consumer price
index was roughly equal to that of the 1920s, rising in roughly equal amounts.
Eisenhower wanted producers of weapons and war-related goods to have influence over
fiscal policy decisions.
The reason food prices rose so little in 1916″19 was the extraordinary increase in output
from the nation’s farms.
Paper money helped colonists pay soldiers for services provided when specie was not
available. This money was fiat money; it did not possess specie backing.
There is clear evidence that the Civil War (1861″1865) aided industrialization in the
U.S.
Regional specialization did not emerge in the colonies due to the small size of the cities
and towns.
On the eve of the Civil War, cotton was the major crop in the Old South.
Up until the early 1880s, there was no federal control over private activities.
Implementation of the National Industrial Recovery Act (1933) positively impacted
overall industrial production.
Income and wealth were equally or evenly distributed by 1860 in the United States.
Unlike the person or persons who formally form a sole proprietorship or partnership, a
corporation has
(a) a perpetual life.
(b) unlimited liability for the debts accumulated by the firm.
(c) the right to vote.
(d) concentrated ownership.
The nature of contracts changed in the 19th century through judicial instrumentalism
and had what effect?
(a) Facilitating free-market determinations of wages and prices.
(b) Allowing factory owners to contract with masses of employees for wages, hours and
working conditions if the terms were made known and the laborers agreed to them.
(c) Advancing the rule of caveat emptor in markets because if a seller unknowingly sold
defective goods, the buyer’s opportunity to inspect the goods before purchase would
ensure the seller’s innocence of overt deception.
(d) All of the above were effects of the changes to the nature of contracts.
Compared to the 19th century, the population of the 20th century
(a) was largely urbanized.
(b) was 3.7 times larger in number.
(c) experienced a 63 percent increase in life expectancy at birth.
(d) can be described by all of the above.
In colonial America, work
(a) was required, at least for the lower classes, even for whites not bound in servitude.
(b) was required of all classes, wealthy or poor, slaves or free.
(c) was the decision of the individual, like it is today, except for slaves and indentured
servants.
(d) was thought to be for the “colored” races, with white folks exploiting their labor.
The police powers of the government include
(a) price fixing.
(b) licensing.
(c) inspection.
(d) all of the above.
What does a successful protective tariff do?
(a) It forces foreign manufacturers to pay higher wages.
(b) It re-enforces competition.
(c) It creates an “economic rent” that goes to the competing domestic industries
producing the taxed imported goods.
(d) It mandates accelerated technological advance in the domestic economy.
What did the growing inequality of income during the 1920s indicate?
(a) That consumption expenditures would tend to weaken even though total income
continued to rise
(b) That spending for goods and business incentives to produce those goods became
increasingly dependent on the wealthy
(c) That the economy became more vulnerable to any shock, such as a stock market
crash, that reduced the willingness of the wealthy to buy goods
(d) All of the above
Why do historians argue that there was a mixture of enterprise, partly private and partly
governmental, in building our transportation system?
(a) Private individuals took the initiative and were able to extract special privileges and
financial assistance from government for the purpose of enhancing their profits.
(b) Political leaders, who wanted transportation improvement for reasons of local or
national ambition, took the initiative and coaxed private enterprise into building the
transportation system by the offer of special financial advantages.
(c) The sheer size of the investment required for a transportation system was beyond the
capability of private enterprise alone.
(d) All of the above ideas have been used by historians to explain the mixture of
enterprise in building our transportation system.
Historians are in general agreement that
(a) railroads opened the country and were built at great risk ahead of demand, gambling
on the future.
(b) railroads sharply cut down transportation costs, linking the country together in all
directions and spurring the nation’s growth far in advance of anything that might
otherwise have been achieved.
(c) railroads were the single innovation of the 19th century that created a great leap
forward in terms of American economic growth.
(d) none of the above are true.
Regarding the issue of slavery, the Constitution
(a) denounced it as being inconsistent with the rights of man and called for its eventual
elimination, though it did not specify clearly how or when this was to be done.
(b) gave slavery legitimacy and support.
(c) made no mention of slavery, with the hope, apparently, that the individual states
would deal with it if they saw it as a problem.
(d) required that the slave trade be immediately banned with all slavery to be
abandoned in twenty years.
Hughes and Cain (2011) argue that the U.S. regards highly hardworking people and
possesses a strong disdain for idle people, especially the rich. These views fuel
animosity toward labor unions because unions
(a) threaten the private rights of business owners to utilize profits in those fashions they
deem desirable.
(b) force business owners to divert profits to conduct research and develop products.
(c) prevent the emergence of a leisure class in the U.S.
(d) all of the above.
The National Banking Act of 1863, did which of the following?
(a) Permitted interstate branch banking
(b) Created one national central bank in the U.S.
(c) Created federally chartered national banks restricted to conducting businesses within
a designated state.
(d) Created federally chartered national banks open to conducting businesses across
states.
When he invented the cotton gin in 1793, Eli Whitney exhibited
(a) entrepreneurial behavior.
(b) greedy behavior.
(c) selfish behavior.
(d) immoral behavior.
Which of the following illustrates the economic inefficiencies of government
regulation?
(a) Railroad rate increases are set by a government agency and these increases fall
below increases in repair and depreciation costs but railroad passengers are satisfied.
(b) Competitive railroad rates are determined by the buying and selling actions of those
in the railroad industry.
(c) Rate increases set by government agencies are set to match the increases in repair
costs and the acceleration in depreciated capital.
(d) Government protects private and individual rights to goods, service and resources.
During the period of rapid industrialization in the U.S. after the Civil War,
(a) real farm incomes fell drastically.
(b) real incomes in the agricultural sector increased at a faster pace than real incomes in
manufacturing.
(c) real incomes in the agricultural sector increased at relatively the same rate as real
incomes in manufacturing.
(d) real incomes in the agricultural sector increased but at a slower pace than real
incomes in manufacturing.
Farming in the New England colonies tended to be
(a) large scale.
(b) worked by slaves.
(c) small scale and worked by members of the family.
(d) exported to England and its trading partners for high profits.
Research in history and economic history shows that before 1880,
(a) there was some government intervention in the private sector of the American
economy.
(b) there was substantial federal regulation of private business organization but little
influence in the economy otherwise.
(c) the regulation and participation that existed were usually of a background nature and
were not concerned with the details of day-to-day private business.
(d) laissez faire was the rule so far as the federal government was concerned.
In the 1970s, the largest steelmakers were slow or failed to adopt quickly the latest
technology: oxygen furnaces. Some researchers blame
(a) the federal government for its enterprise-crippling policies, subsidies and import
restrictions.
(b) unions for their low productivity efforts and high wage demands.
(c) management for not keeping abreast of global changes in the marketplace.
(d) all of the above.
The change from prescriptive rights to priority rights meant all of the following except
(a) Entrepreneurial costs of economic development, such as river and lake pollution,
had to be paid by those who were responsible for the costs.
(b) The courts encouraged entrepreneurial activity by judicial interpretation.
(c) Amenity rights to scenery, clear air and quiet enjoyment could be reduced.
(d) Judges placed social weights upon property rights that favored some more than
others.
After the Civil War (1861″1865), the cotton South
(a) continued to experience prosperity.
(b) was no longer the main contributor to the agricultural sector, as wheat production
elsewhere began to prosper.
(c) experienced prosperity in some Southern states but not in all.
(d) was no longer the major source of income for the South; Southerners quickly
supplemented their cotton incomes with income generated by the manufacturing sector.
Employment in the tertiary sector in the 20th century showed
(a) a marked cyclical tendency in harmony with the business cycle.
(b) a leveling off in times of recession.
(c) a downturn during cyclical expansions.
(d) a steady increase since 1900.
A study of American economic history excludes a study of which of the following?
(a) Historical demography
(b) The love affairs and private relationships of U.S. presidents
(c) Development of market rules and regulations
(d) Development of government intervention in market affairs
The Constitution created an environment conducive to economic growth and
development because the federal government could constitutionally do all of the
following except
(a) Levy uniform taxes
(b) Coin money and regulate its value
(c) Regulate commerce, thus prohibiting states from erecting barriers to the interstate
movement of goods
(d) Set “fair” prices on the private sale of goods in the marketplace
The downturn in the immigration cycle beginning in the 1850s is attributable to which
group?
(a) Children
(b) Grandparents
(c) Women
(d) Men
Which of the following is not a valid criticism of Fogel’s (1964) methodology in his
study of railroads?
(a) The canal prices used for 1890 were low.
(b) The impact of railroads on financial markets is ignored.
(c) The nonpecuniary gains from using railroads could have been considered.
(d) The amount of land cultivated would have been reduced.
The South’s post-Civil War (1861″1865) backwardness was due to all of the following,
according to Hughes and Cain (2011), except
(a) Extensive wartime destruction of life and wealth
(b) The fiscal disaster of the Confederacy, whereby nine-tenths of the state banks of the
South vanished
(c) The price of cotton, which did not fall, but did fail to increase as it had prior to the
Civil War (1861″1865), thus turning cotton into a less profitable crop
(d) The sharecropping system’s failure to provide incentives for innovation in
agriculture
Which of the following economists is/are considered the leader(s) in the theory of
market behavior?
(a) Alfred Marshall
(b) Adam Smith
(c) David Ricardo
(d) All of the above
Bracket creep forces taxpayers to pay a larger percentage of their income in taxes when
which of the following occurs?
(a) The emergence of high unemployment
(b) Inflation
(c) Deflation
(d) The growth of trade deficit(s)
According to the 1790 census, the majority of whites had links to
(a) the British Isles, thus explaining why British institutions were selected to guide
development and growth in the colonies.
(b) Germany, thus explaining why German institutions were selected to guide
development and growth in the colonies.
(c) Spain, thus explaining why Spanish institutions were selected to guide development
and growth in the colonies.
(d) Madagascar and Zanzibar, thus explaining why institutions from Madagascar and
Zanzibar were selected to guide development and growth in the colonies.
Which of the following was NOT a part of Chandler’s (1977) description of the rise of
big business in the 19th century?
(a) Vertical integration of firms
(b) The development of mass production
(c) The development of mass distribution
(d) The use of central planning to improve production techniques
Which of the following statements holds true for eminent domain?
(a) The costs are diverse and the benefits concentrated to those special groups who
secured it.
(b) It supports rent-seeking where some individuals gain and others lose.
(c) The owner of the property secured through eminent domain has no legal recourse.
(d) It is well-defined and has been applied throughout U.S. history with consistency and
accuracy to support economic growth and development.
Wal-mart
(a) is the railroad of the late nineteenth century.
(b) provides an example of how one large business enterprise still can seize market
power to restrict entry and exit.
(c) holds monopoly power in retail.
(d) exists at the expense of consumers.