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The early U.S. canals and railroads were built by private enterprise without the aid of
governments.
Thomas Jefferson supported the Land Ordinances of 1785 and 1787.
In 1912, the National Monetary Commission denounced the existing financial system of
the U.S. and, in a report, detailed the levels at which it restricted domestic producers'
abilities to function globally.
Most surveyed economists support Fogel and Engerman's (1974) position that
plantation owners were largely rational and treated slaves in their best profit interest.
The Great Depression was marked by non-farm housing slumps and falling real estate
prices, prompting many states to impose a moratorium on residential mortgage
foreclosures.
During the colonial period, the English permitted both silver and gold to move freely in
and out of the colonies.
Monetarists maintain that the increase in the money supply can explain the inflation of
the 1970s and 1980s when one considers the bonds purchased by the Fed to finance the
federal deficits of the period.
Contrary to Fogel and Engerman's (1974) claim, most surveyed economists believed
that slavery was on the verge of extinction on the eve of the Civil War.
Shortly after the American Revolution, governmental involvement in market affairs was
largely abandoned in the Confederate States and economic growth resulted.
A slowdown in labor productivity causes a slowdown in economic growth when all else
is held constant.
The last of the public land was sold between 1881 and 1907.
The research of Ben Bernanke (1983) found the banking system of the 1930s to be
fundamentally flawed and unable to serve its function of financial intermediation.
Federal help was needed.
The commerce clause strengthened the federal government's interventionist power in
industries operating on a national scale.
Printing money was the main method the Union government used to finance the Civil
War (1861"1865), and as a result the money supply in the North rose by a factor of 4.
Technological advancements and changes in factor proportions shift a producer's
comparative advantage.
Studies indicate that after the Civil War and up to the 1890s, farmers did not benefit
from an improvement in their terms of trade between agriculture and manufacturing.
However, they did benefit from a decline in transportation charges relative to farm
prices.
A trade deficit can produce inflation when a country and its trading partners are on the
gold standard or a bi-metallic system.
The U.S. federal government embraced all of the Populists' requests, including the
nationalization of the railroad system.
The demand for goods and services decreases with a rise in employment and income.
Provision was made for squatters' rights in the 1785 Northwest Ordinance.
During World War II (1941"45), Engel's law applied. As income rose, consumption of
food dropped relative to all other goods and services purchased.
The rights of state and local government to regulate, license and control businesses
were taken away after the American Revolution.
Most canals were economic failures.
Entrepreneurship results in an equal distribution of wealth and income.
The federal spending policies of the Great Depression were clearly expansionary and
helped return the U.S. economy to the low levels of unemployment experienced during
the 1920s.
The Marshall Plan (1948"51) brought about the immediate integration of Europe into
international markets.
Many railroads received government subsidies and land grants and, thus, were
influenced by the government.
By the end of the 20th century, the countries of origin of the new U.S. immigrants
shifted away from its European majority. A smaller percentage of total immigrants
arrived from Europe, and more and more came from Asia, Canada and Mexico.
The organized labor movement was held back by the law of conspiracy.
Private profits provided colonial producers with incentive to direct the use of their
regional resources in those fashions that produced the highest yield in world markets.
Tariff rates remained high after the Civil War because government revenue needs were
pressing and there were protectionist sentiments.
Many researchers blame the severity and length of the Great Depression on the breadth
and depth of government interference in private market affairs.
According to the quantity theory of money, an increase in the stock of precious metals
or bills of exchange usually results in increased trade and rising prices. Both economic
events helped merchant capitalists and the king.
Tertiary employment tended to require generalized education and/or training and,
therefore, it was found primarily in rural areas.
The U.S. experience with the rise and fall of its railroad industry illustrates that central
planners are less likely than private investors to allocate investment funds into
wealth-creating projects.
Thomas Jefferson strongly influenced the passing of the Land Ordinances of 1785 and
1787. A close study of those ordinances suggests that Jefferson believed in the
importance of securing the private rights of individuals to buy, sell and derive income
from their land.
In the Thomas (1954) model,
(a) all nations near the Atlantic Ocean were considered one economic unit.
(b) laborers, capital and other resources freely move to those users with the highest net
returns.
(c) the European economy moved inversely in relation to the U.S. economy and vice
versa.
(d) all of the above are true.
Chandler (1994) maintains that domestic labor productivity has a tendency to dip with
(a) a decrease in the variety and number of new goods and services.
(b) flat consumer demand.
(c) increased foreign competition.
(d) all of the above.
Which act established rules and regulations for minimum wage, overtime pay,
record-keeping and child labor standards?
(a) Fair Labor Standards Act of 1938
(b) Walsh-Healy Act of 1936
(c) National Industrial Recovery Act (1933)
(d) Wagner Act of 1935
World War I (1914"18) caused inflation because
(a) war production stressed an economy already operating close to full employment.
(b) fiscal policy mandated it.
(c) the Federal Reserve System required it.
(d) inflation always occurs in times of war.
Holding all else constant, when interest rates fall,
(a) yields on common stocks rise above yields on bonds.
(b) yields on common stocks fall below yields on bonds.
(c) yields on common stocks and bonds rise at an equal rate.
(d) yields on common stocks and bonds fall at an equal rate.
What did the Economic Act of 1946 require the U.S. government to do?
(a) Keep its "hands off" the economy
(b) Present an annual "Economic Report of the President"
(c) Let market forces determine equilibrium quantities of labor hired and wages paid
(d) Maintain a current account surplus where U.S. exports exceeded imports each year
President Woodrow Wilson
(a) fostered the growth of government bureaucracy.
(b) quickly returned the U.S. economy to a competitive market place.
(c) remained neutral on the issue of whether the federal government should intervene in
private market affairs.
(d) mandated that Congress operate with a balanced budget.
Tariff rates remained high in the U.S. throughout the postbellum period for which of the
following reasons?
(a) The government needed revenues to finance its expenditures.
(b) Special interest groups organized themselves to realize rents.
(c) Land sales dwindled as the Western frontier closed.
(d) All of the above.
The Bretton Woods Systems established
(a) the International Monetary Fund.
(b) the International Bank for Reconstruction and Development (the World Bank).
(c) the International Trade Organization (WTO).
(d) all of the above.
With regard to incomes at the time of the Revolution,
(a) colonial incomes before taxation were high, but because of heavy taxation, after-tax
incomes were lower than those of the British.
(b) there is no data available that provide any information on the subject.
(c) both before-tax and after-tax colonial incomes were lower than those in England.
(d) incomes in the colonies were higher than in England, especially after-tax incomes,
because of relatively light taxation of the colonists.
The energy source most often used by the earliest factories was
(a) animal power.
(b) wind power.
(c) water power.
(d) steam engines.
Which statement holds true in the post-World War II era?
(a) There was a permanent increase in the percentage of working adult women with
children.
(b) Firms found it most profitable to treat women as individuals rather than groups.
(c) Marriage bars returned.
(d) Female participation in farming, common labor and craft work in the U.S. increased
significantly.
Most towns were initially established at locations with
(a) an excellent harbor and river stretching into the hinterland.
(b) an excellent harbor and flat land so roads could be easily built into the hinterlands.
(c) in mountainous areas which provided better protection against Indians.
(d) extensive forests to provide fuel and lumber.
In connection with laborers, the law of conspiracy meant that
(a) employers had every right to organize or conspire to keep wages low and prices
high.
(b) workers had every right to organize or conspire to keep wages high and
working hours short.
(c) workers could organize unions to promote their own interests as long as they did it
publicly and in fair dealings with employers and did not "conspire" to do it in secret
meetings not open to the public.
(d) worker organizations aimed at promoting the economic interests of the
members were illegal.
According to Hughes and Cain (2011), American economic history is the story of
economic growth. Economic growth
(a) necessarily means an improvement in the quality of life for all individuals.
(b) does not necessarily measure an improvement in the quality of life; it merely
indicates the potential for improvement.
(c) as conventionally measured considers an employed person living in the pollution
and congestion of modern Tokyo to be "worse off" than a sun-tanned artist watching
another glorious sunset on the beach in Tahiti.
(d) is measured by the increases in total output of goods and services less any
environmental destruction that occurs in the process of production.
According to Robert Gordon (1969, 1999), the extraordinary expansion of physical
production in 1942"45 was achieved by
(a) massive government investment in new plants and equipment.
(b) finally bringing into production manufacturing plants and equipment that had been
idle since the early 1930s so that big government investment was not necessary.
(c) the Federal Reserve's peg on the bond market, which enrolled the private sector
to mobilize the necessary capital to invest in new plant and equipment.
(d) none of the above.
A "great merger movement," whereby firms combined with former rivals to become
large firms, began in the 1890s. Who was the first President to look to bigger
government as a way to cope with the economic power of these concentrated
industries?
(a) Woodrow Wilson
(b) Herbert Hoover
(c) Theodore Roosevelt
(d) Franklin Roosevelt
Chief Justice John Marshall had a strong conviction that
(a) slavery would only work in the South.
(b) a country needs a central government with enough power to place in check state and
local interests when the development and growth of the country is concerned.
(c) strong state banking systems would help the nation's commerce.
(d) the Constitution should be interpreted literally.
With regards to money in the colonies,
(a) the colonies did not produce enough of their own precious metals to coin money.
(b) the British did not allow the export of their own coins to the colonies but did not
object to foreign coins flowing into the colonies.
(c) the British did not allow paper money created by the colonies to be declared legal
tender, but this policy did not prohibit the colonists' use of it.
(d) all of the above apply.
The Kennedy Tax Cut, enacted in 1964 after his death, was the first supply-side tax cut
used in U.S. history. Its intent was to stimulate the economy by reducing tax rates in
order to do what?
(a) Reduce supply
(b) Increase production, employment and disposable income
(c) Increase government spending
(d) Increase the money supply
Which of the following provides a tool by which you can measure overall price changes
paid by representative individuals living in urban households?
(a) The GDP Deflator (NGDP/RGDP*100, expressed as a percentage)
(b) The Producer Price Index
(c) The Consumer Price Index
(d) The Housing Price Index
By 1910 the top ten industries included printing, malt liquors, tobacco cars and railroad
cars. The introduction of these new top ten industries indicated
(a) a shift in consumer preferences toward luxury items.
(b) an increase in real incomes in the U.S., permitting people to purchase luxury items.
(c) a smaller percentage of total consumption expenditures on essential food, clothing
and shelter.
(d) all of the above.
One reason the colonials complained about the Navigation Acts was
(a) the 'shortage" of money; they believed the trade deficits of the colonies were
bleeding them of coins.
(b) the 'surplus" of money that was causing inflation; they believed the trade deficits
were flooding the colonies with coins.
(c) the Acts' not allowing foreign coins, which created a 'shortage" of foreign coins
relative to British coins.
(d) the Acts' requirement that only paper money would circulate in the colonies, without
the backing of gold.
The techniques of regulation used in the U.S. are
(a) meant to solve basic problems, but they create others.
(b) meant to re-enforce the "decisions of the marketplace."
(c) meant to manage problems rather than solve them.
(d) designed to make the economy more efficient than is possible with only the free
market mechanism.
All of the following were important structural changes in American capitalism during
the period 1960"95 except
(a) New technology in the form of automated (machine-guided) production processes
(b) A capital-labor accord which allowed workers to share in productivity gains through
wage increases, particularly during the 1950s and 1960s
(c) An increase in self-sufficiency as the nation reduced its economic interdependence
with other nations
(d) A large and central role for government in directing the post-war economy
All of the following trends and characteristics of American population growth occurred
from Independence to the Civil War except
(a) The size of the average family was increasing.
(b) Populations living in urban places increased.
(c) There was extensive settlement in rural areas.
(d) Growth was very rapid.
The growing post-war (1945"50) economy was sustained by
(a) an expansion of government expenditures.
(b) the general expansion of nearly all sectors despite the decline in government
expenditures.
(c) significant increases in both government and private expenditures.
(d) trade deficits.
The economics of slavery suggests that
(a) slave labor produced efficiencies in Southern agriculture.
(b) slave owners possessed economic incentives to beat and exploit their slaves.
(c) Southern agriculture was less profitable than northern farming.
(d) Southern agriculture was just and moral.
When output is held constant, inflation does which of the following?
(a) Increases real GDP
(b) Increases real income
(c) Increases government spending
(d) Reduces the purchasing power of individuals living on fixed incomes.
Greenbacks were first issued
(a) by the Federal government to help the economy out of a recession in the 1850s.
(b) by the States to pay for the construction of canals.
(c) by the Federal government to help pay for the Civil War (1861"1865).
(d) by banks during the Free Banking Era.
Which of the following statement(s) is true?
(a) All state legislatures acted to create corporations.
(b) The federal government created the federal incorporated entities when it established
the First (1791"1811) and Second (1816"1836) Banks of the United States.
(c) All federal, state and local governments possessed the right to create corporations.
(d) All of the above are true.
Identify which of the following motivated European expansion in America.
(a) International trade and finance opportunities
(b) Precious metals such as gold and silver
(c) The hope of finding a northwest passage to the Orient
(d) All of the above
Which of the following revenue-raising options did the "colonial" government select to
secure the resources needed to revolt?
(a) Printing money and borrowing from other countries
(b) Printing money and confiscating property
(c) Taxing and borrowing from other countries
(d) Taxing and reducing non-military government spending
Which of the following groups benefited from the Civil War (1861"1865)?
(a) Wage earners who suffered declining real earnings as wages lagged behind the
inflation
(b) Those groups issuing bonds during the war
(c) Those farmers whose crops and farm animals were destroyed
(d) Slave owners who parted with their property without compensation
Today, the Federal Reserve System can contract the money supply by
(a) increasing the discount rate.
(b) increasing reserve requirements.
(c) selling U.S. Treasury and federal agency securities.
(d) engaging in all of the above.
