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The slave gang system increased labor productivity by encouraging members of a slave
gang system to specialize in performing assigned tasks and working in rhythm.
The U.S. economy experiences a public debt when the value of its annual deficits
exceeds the value of its annual surpluses over an extended period of time.
The number of private state banks decreased after the First Bank of the United States
lost its charter.
The evidence shows that the domestic and world markets for American cotton
contributed to the spread of slavery into new lands.
Rising agricultural prices and opportunities to own land provided people with
incentives to migrate to the trans-Appalachian states.
During the antebellum period, the U.S. used more economic output and resources than
were domestically available during expansions and less during contractions.
International trade assisted during these cyclical times.
The decisions of today have consequences that lie in the future.
The Navigation Acts (1651 and later amendments) were intended to promote shipping
and international commerce.
In September 1929, Roger Babson predicted the collapse of the stock market.
Until 1860, the domestic and international demand for cotton provided motive to
expand slavery.
Of the 1790 colonist population, over 80 percent was of European origin while about 20
percent was of African origin.
Railroads fueled the expansion of all markets in the post-bellum period of U.S. history.
Taxes impose a cost on letting land remain idle.
In the case of Commonwealth v. Hunt (1842), the Massachusetts Court held that labor
unions are not necessarily illegal. They may stop work and boycott products without
committing unlawful acts.
The money value of all trading activity (Q) at market prices (P) is called Gross
Domestic Product for a given year.
The percentage of the population that lived in urban areas rose from approximately 5%
in 1790 to 40% in 1860.
During a banking crisis during the period of free banking, the unexpected surge in the
demand for money in the form of specie would cause bankers to call in loans which
would, in turn, squeeze credit, slow output and increase unemployment.
Sharecropping successfully replaced the slavery system.
One of the main production advantages of the steam engine was the flexibility of its
location.
Under British rule, colonists were considered British subjects and had most of the same
rights of British citizens.
World War II was the first event that provided the federal government with incentive to
support labor unions and help them achieve some of their goals.
Internal and external economies positively contributed to U.S. industrialization.
Most new settlement in the West came from homesteads.
The Populists succeeded in using the federal government to limit subsidies granted to
corporations.
Tariffs provide domestic producers with incentives to be inefficient and operate on the
basis of comparative disadvantage.
After World War II, the U.S. dollar was to become the main, official "reserve currency
of the new international order," according to Hughes and Cain (2011).
Traditionally, laws of incorporation have been predominantly privileges of the states.
A government runs a deficit when its government revenues exceed expenditures.
By 1913, the dominant method of making basic steel was the open-hearth furnace.
The Greenbackers' demand to back the greenback issues with gold reserves was not
practical in the late 1860s.
By the time the Civil War (1861"1865) ended, hyperinflation was a problem in both the
North and the South.
During the 20th century, the percentage of unskilled laborers in the U.S. rose steadily.
Secured property rights provide individuals with incentive to use the resources they
own productively because they realize the gains from this use.
During the 1915"1919 fiscal years, income tax revenues comprised approximately 53%
of total federal revenues. Today, over 80% of total tax revenues are raised through
income taxes.
Couples marrying at younger ages in colonial America than in Europe contributed to the
relatively higher birth rates.
There is evidence to suggest that slaves were commonly sold and families were often
separated.
Operation on the basis of comparative advantage led to the regional specialization of
the use of slaves in the North.
The right to grant charters to incorporated firms is reserved to the federal government,
according to the Constitution.
Which of the following cases was most important in arguing that the "public good" was
best served by competition?
(a) Marbury v. Madison (1803)
(b) McCulloch v. Maryland (1819)
(c) Gibbons v. Ogden (1824)
(d) Charles River Bridge v. Warren Bridge (1837)
Which of the following is false?
(a) The right of government to maintain settled and peaceable conditions, by force if
necessary, is called police power.
(b) The Constitution is the basic framework of law; the day-to-day interpretation and
application of it is a matter for legislatures and the courts.
(c) The property rights established in the colonial era were weakened somewhat by
the U.S. Constitution.
(d) The freedom of courts to interpret the law or legislation is called judicial
instrumentalism.
Investment in the agricultural economy of the antebellum period of U.S. history usually
entailed everything below except
(a) Clearing lands
(b) Purchasing stocks and bonds
(c) Constructing fences and buildings
(d) Purchasing farm implements
In 1860, earnings from cotton exports
(a) were minimal.
(b) accounted for a small percentage of Gross Domestic Product.
(c) exceeded the total revenue of the U.S. government by four-fold.
(d) were what attracted the majority of agriculturalists into cotton production.
Scherer (1970) provides which of the following argument(s) to explain the appearance
of antitrust laws?
(a) Many farmers believed that the growth of big business came at the expense of
growth in agriculture.
(b) Many ordinary individuals with moderate or low incomes were envious of the
fame and wealth accumulated by the relatively few industrial entrepreneurs.
(c) Falling costs in transportation resulted in growth of the optimal size of the firm.
(d) All of the above.
During World War II (1941"45) which of the following fell?
(a) Real GDP per capita
(b) Private consumption expenditures
(c) Private investment
(d) Government expenditures
President Franklin D. Roosevelt's first action regarding the run on banks was to
(a) close all banks.
(b) increase the money supply.
(c) prohibit bank foreclosures.
(d) provide federal guarantees to depositors.
Incentives matter and different groups of producers, consumers and politicians will
support those policies that promise to advance those projects most advantageous to
them. Which statement about opposition to or support for U.S. tariff policy during the
antebellum period is correct?
(a) "Producers in the South objected to tariffs placed on imported goods. They needed
them at relatively low prices for their own production."
(b) Plantation owners supported a high tariff as protection against cheap cotton imports.
(c) Politicians wanted to protect jobs abroad as well as in the U.S. Therefore, they did
not support U.S. tariff policies.
(d) All of the above are correct.
The U.S. system of property rights
(a) is strictly private.
(b) is influenced by a mix of private and public forces.
(c) does not permit governmental seizure of property under any circumstances.
(d) does not permit the government to seize earned income through taxation.
During the colonial period,
(a) both men and women married on average during their teenage years.
(b) women married on average during their teenage years and men during their early
20s.
(c) both men and women married on average at ages between 20 and 25.
(d) both men and women married on average during their late 20s.
Intermediation entities include which of the following?
(a) Life and fire insurance companies
(b) Stock exchanges
(c) Mutual saving banks
(d) All of the above
To secure a charter, the deciding bodies required which of the following from the
business enterprises?
(a) A statement of business purpose and location
(b) A business plan
(c) A description of capital and labor requirements and expectations
(d) All of the above
The absence of significant scale economies in 19th century agriculture outside the
cotton South produced all of the following except
(a) More equal income distribution
(b) Numerous family farms
(c) The widespread need for schools
(d) Large, corporate farms using the latest technology
In general, in the 19th century, America
(a) was a low tariff nation because it was believed that free trade brought specialization,
efficiency and more rapid economic growth.
(b) was a nation that kept its tariffs at about the same levels as England so as not to give
the British an advantage.
(c) was a high tariff nation which believed, from the days of Alexander Hamilton, that
America's industry needed protection from the more industrially advanced England.
(d) had a moderate level of tariffs, compared with England, whose main purpose was to
provide the federal government with revenues.
Which of the following did not occur during the period 1960"95?
(a) The problem of inflation
(b) The growth of federal budget and trade deficits
(c) Rising unemployment rates
(d) All of the above occurred during this period.
The inflation that occurred during the Civil War (1861"1865) can be described as all of
the following except
(a) A means of expropriating resources to fight the war
(b) A form of taxation to provide resources to fight the war
(c) A representation of a decrease in the purchasing power of money
(d) A less expensive way of paying for the war than taxation
When World War II (1941"45) came,
(a) the labor force expanded by very little despite the high unemployment of 1941.
(b) unemployment was still high enough that the armed forces could be expanded
and war production expanded without a large increase in the labor force.
(c) a large increase in the labor force occurred in all categories, including men over 65
and women.
(d) none of the above occurred.
The arguments of Kessel and Alchien (1959) on the terms of trade and the question of
"who paid for the Civil War (1861"1865)" conclude that 40 percent of the war's burden
fell on
(a) those who exported manufactures.
(b) those who purchased imports.
(c) farmers alone.
(d) the economy as a whole.
Changing conditions in transportation during the years following the Civil War
(1861"1865) provided an economic explanation for which of the following?
(a) Railroad amalgamation
(b) A well founded fear of monopolies by agriculturalists
(c) Large government funding budgets for railroads
(d) All of the above
Who can create valuable output out of idle property?
(a) labor
(b) entrepreneurs
(c) tenants making rental improvements
(d) all of the above
Which of the following is true for the period from Independence to 1860?
(a) The system of indentured servitude died out because it was seen to be immoral and
inconsistent with the Constitution.
(b) The system of slavery flourished because the relative price of slaves fell
consistently.
(c) The system of wage labor flourished as immigrant labor poured into the newly
opened western lands.
(d) European immigrants typically shunned agricultural labor as their ticket to the good
life.
By the mid-nineteenth century,
(a) indentured servitude disappeared in the U.S.
(b) slavery was disappearing.
(c) more and more immigrants were drawn into the production of agricultural goods on
large plantations.
(d) all of the above were true.
Even though reliable data is lacking, the Beard-Hacker Thesis maintains that the Civil
War (1861"1865)
(a) was more costly to the South than to the North.
(b) ended Southern prosperity through the abolition of slavery.
(c) increased immigration to the U.S.
(d) sped up the industrialization of the U.S.
With regard to colonial land settlement and the land beyond the Appalachians,
(a) secure land titles had to come from established authority; land typically could not be
claimed simply by 'squatting" on it.
(b) throughout most of the colonial period, authority over the land beyond the
Appalachians was not easy to establish because both the English and the French laid
claim to most of the Mississippi watershed.
(c) the original grants of land to colonial settlers from the crown had been "from sea to
sea."
(d) all of the above are true.
The "monopoly issue" is concerned with the fact that
(a) monopolies will "charge what the traffic will bear" in order to maximize their
profits.
(b) monopolies will attempt to increase their profits by discriminating among their
customers and charge prices that they are willing to pay, instead of charging one price.
(c) monopolies will be able to charge higher prices and earn higher rates of return
than competitive firms.
(d) all of the above apply.
Regarding the privilege of incorporation (the right to organize an enterprise in the
corporate form), all of the following are true except
(a) It gives a business firm limited liability, perpetual life and the rights of a citizen.
(b) It is not provided for directly by the Constitution because, apart from state
governments, the Constitution made no provisions for groups.
(c) It is provided for at all levels of governmentfederal, state and local.
(d) There is no "except"; all of the above are true.
Which is considered fiat money?
(a) Greenbacks
(b) Gold coins
(c) Silver dollars
(d) Silver certificates
The need for government subsidies of irrigation produced
(a) the Desert Land Act (1877).
(b) the Interstate Commerce Commission Act (1887).
(c) the Newlands Act (1902).
(d) all of the above.
Darby (1984) argues that the problem with declining productivity of the 1970s was not
an issue. He adjusted labor productivity upward to take into account which of the
following?
(a) The immigration policies of the 1970s restricted the free migration of highly
qualified workers.
(b) More men than women re-entered the workforce.
(c) The overall labor force was relatively young and comprised of individuals still
maturing in their knowledge base and skill sets.
(d) The labor force of the 1970s was older, more senior and had gained more experience
than in the past.
Which of the following is an economic argument used to explain why slavery persisted
in the U.S.?
(a) Slavery crushed out individualism among slaves.
(b) The social structure of slavery did not permit black leaders to lead revolts.
(c) Slavery was an overall moral institution.
(d) Slavery was a rational institution.
Richard Easterlin (1968, 1987) maintains that the 20th century's pattern of births was
(a) affected primarily by Real Gross National Product (Real GNP).
(b) negatively affected by the U.S. population's materialistic desires and positively
affected by its income.
(c) explained by waves of discrimination.
(d) explained solely by the wars.
Why was the stock market crash of 1929 a disaster for the economy?
(a) Through the "wealth effect," investors lost paper wealth and consequently reduced
their spending on goods and services. This led to cutbacks in production and jobs.
(b) Businessmen became pessimistic about the future and reduced spending on plants
and equipment, thus causing reduced production and increased layoffs in the
capital-goods sector of the economy.
(c) The crash revealed a flawed structure of credit and weak system of banks and other
financial institutions in the U.S.
(d) All of the above are correct
The Land Ordinances of 1785 and 1787 accomplished which of the following?
(a) Established the foundation for future American capitalism by permitting land to pass
into private hands
(b) Allowed the practice of primogeniture or inheritance by the oldest son
(c) Permitted land to be treated primarily as a "collective good"
(d) Provided for a lateral expansion of American socialism
