The U.S. Constitution established the orderly sale of the western lands.
Secure rights to land provided colonists with incentive to use the land productively,
conserve it and invest in it.
Historically, the U.S. government has been used to overcome crises, redistribute income
and wealth and address negatively received market outcomes.
Unlike World War I (1914″18), the war debt of World War II (1941″45) was
manageable and did not contribute to inflation.
The Interstate Commerce Commission (ICC) (1887″1995) was the very first attempt by
Congress and/or the federal government to regulate the railroads; regulation had
previously come solely from the states.
Southern slave owners were not rational people and did not strive to maximize profits
through the use of the slave system of production.
Unlike colonial America, there are no government restrictions on business activities and
practices today.
The Aldrich-Vreeland Act of 1908 provided for temporary emergency currency for
national banks.
The following have strengthened individual control over private property: taxation,
zoning, land-use restrictions and eminent domain law.
Land sale booms were caused by large waves of immigration.
Rural families were larger in size, on average, than urban families during the
antebellum period. Some argue that the relatively high rate of return on a child born on
a farm partly explains why. Children born on farms could be considered investments
goods”goods” used to produce something else.
The income tax levied during the Civil War (1861″65) was declared constitutional in
Springer v U.S. (1881) because it was not a direct tax.
Early industrialization was characterized by labor-saving technology, and this caused
U.S. wages to be lower in the manufacturing industry than would otherwise have been
the case.
The government significantly raised farm incomes by raising farm prices by: (i)
destroying crops, (ii) slaughtering millions of baby pigs and pregnant sows, (iii) paying
farmers not to grow crops and (iv) injecting dye into harvested potatoes, making them
inedible.
Individuals rationally choosing career paths should weigh the preparation costs to the
potential incomes generated within those careers.
The greater the social immobility is within a country, the greater the chance that human
talent and skills will not go to waste.
The power of the U.S. government to seize private property or exercise the right of
eminent domain was an English innovation.
Animal skins, livestock, tobacco, teeth and rocks have historically served as a medium
of exchange, unit of account, store of value and method of deferred payment.
The New Deal succeeded in ending the Great Depression.
The expansion of governmental direct controls over the economy which characterized
the “New Frontier” and “Great Society” programs of the Kennedy-Johnson years was
continued and expanded by the Nixon Administration.
With the exception of the U.S., the majority of the world’s trading partners utilized the
gold standard.
Classical economists argue that all workers could have been employed during the Great
Depression if they had been willing to accept falling wages. But President Hoover and
his supporters recommended that hours be cut before wages which increased
unemployment.
Population growth in the early nineteenth century was slow due to the lack of
immigration.
A federal surplus is deflationary when all else is held constant.
Output produced and sold always generates profits for businesses.
By the end of the 19th century, bituminous coal still was the largest single source of
mineral energy used in this country, despite the enormous increase in oil production and
refining.
State banks failed to find a way to print money under the Constitution.
When World War II (1941″45) came, the U.S. civilian labor force could be expanded
only by about 30 percent.
Modern research suggests that colonial Americans experienced positive rates of
economic growth but not a high quality of life.
Between 1866 and 1914, statistical evidence suggests that many big businesses
depended heavily on U.S. protectionist policies.
The U.S. claimed a disproportionate share of world trade given its share of the world’s
population.
Hughes and Cain (2011) effectively argue that advancements in power technology
helped open new opportunities for the strategic placement of cities and big factories.
Economic historians have located evidence to suggest that colonists barely lived at
subsistence levels.
During the antebellum period, U.S. consumers increased their demand for
mass-produced, standardized and simple goods.
During the New Deal, the structure of capitalism in the U.S. changed forever in each of
the following areas except for one. Which one?
(a) The relation between government and markets changed in the sense that government
interventions of one sort or another occurred.
(b) The Federal Reserve System began to control actively the money supply and interest
rates to control overall levels of consumer and business spending in the economy.
(c) Government spending rose and was intended to serve as an economic stimulus,
similar to private investment spending.
(d) Individual households began to take greater charge over their own economic welfare
with no government assistance.
The Granger Cases of the 1870s
(a) sealed the fate of the U.S. railroad system, even though the cases were covered
under a case involving a grain elevator.
(b) came before the U.S. Supreme Court because state legislatures had passed laws in
the 1870s to allow state agencies to control various aspects of railroad operation,
including rate setting; these laws were then challenged by railroad companies.
(c) established the principle that railroads were unquestionably subject to permanent
regulation.
(d) are true for all of the above.
A secondary effect of installment credit was the
(a) development of a new market in used durables.
(b) emergence of a new network of dependable supplies of electric power.
(c) surge in prices.
(d) increased government intervention in household activity.
The research of Gavin Wright (1978) on the antebellum period suggests that
(a) there was no limit on the profitability of the plantation utilizing slave labor.
(b) issues with management, communication and discipline limited the profitability of
the slave plantation.
(c) more than 75 percent of the Southern farms were plantations and utilized slave
labor.
(d) all of the above.
In the last three decades of the 19th century, the long-run supply track of farm prices
(a) indicates a decline in farm prices due to a slowly increasing demand and a more
rapidly increasing supply.
(b) indicates a decline in farm prices due to a slowly increasing supply and a more
rapidly increasing demand.
(c) indicates an increase in farm prices due to a slowly increasing supply and a more
rapidly increasing demand.
(d) indicates relatively constant prices due to the fact that supply and demand were both
increasing at about the same rate.
The Interstate Commerce Commission (ICC)
(a) was the first permanent independent federal regulatory agency.
(b) was established because, given the interstate nature of railroads, the regulation the
public demanded from the states simply passed to the federal government.
(c) initially lacked the power to set railroad rates, but its founding marked the beginning
of a kind of federal government power capable of almost infinite expansion.
(d) is best described by all of the above.
Growth rates in labor productivity
(a) increased in the 1970s.
(b) slowed across all employment sectors, with some experiencing more severe drops
than others.
(c) decreased across all employment sectors at the same rate.
(d) were largely stagnate.
Today, financial intermediaries specialize in all of the following activities except
(a) Printing money
(b) Lending
(c) Borrowing
(d) Accepting deposits
Between Independence and the Civil War, American population growth was
(a) steady and constant.
(b) rapid but wildly unstable.
(c) positive and rapid.
(d) heavily concentrated in the settlement in Western lands.
How does the federal government influence the flow of goods and services into the
country and, consequently, create extra profitability or rents in domestic production that
would not have been there under free market conditions?
(a) tariffs
(b) minimum wage laws
(c) control of the public domain
(d) federal income taxes
The “New Deal” measures introduced in 1933 and 1934 to end the depression
(a) brought about almost complete recovery by the mid-1930s.
(b) were not completely successful in ending the Depression, which lasted until the
beginning of World War II.
(c) actually interfered with recovery, and the Depression worsened in the mid-1930s.
(d) were not very successful at first but finally ended the Depression by the late 1930s.
The Dred Scott v. Sanford decision of the U.S. Supreme Court in 1857
(a) made all persons born in the U.S. citizens.
(b) provided U.S. citizenry to the children of U.S. born slaves.
(c) permitted slaves to sue others in courts.
(d) prevented slaves from being taken away from their owners without due process.
Under the Employment Act of 1946, what action did the federal government take for
the first time in U.S. history?
(a) Assuming power and responsibility for managing the world economy
(b) Assuming power and responsibility for managing the U.S. economy
(c) Relinquishing all influence for managing the U.S. economy to state governments
(d) Relinquishing all influence for managing the U.S. economy to the private sector
During the decade of the 1920s, the distribution of income
(a) became increasingly equal.
(b) changed little or not at all.
(c) became increasingly unequal.
(d) may or may not have changed, but it is difficult to know because of lack of data.
The Granger Cases of the 1870s
(a) represented farmers’ overall support for changes in the railroad industry.
(b) served to organize collectively and support legally the economic, political and social
values of farmers.
(c) organized the collective interests of railroads in what was known as “The Grange of
the Midwest.”
(d) are true for all of the above.
Which of the following is an example of external economies?
(a) The cost of per unit produced in manufacturing goods falls as the industry size
grows.
(b) The cost of per unit produced falls as the firm size, not the industry size, grows.
(c) The cost of per unit produced in manufacturing goods increases as the industry
grows.
(d) The cost of per unit produced falls as the size of the firm grows.
In colonial America, the average wage laborer
(a) received health care benefits, over-time pay and injury compensation. They
also worked in safe and healthy environments.
(b) achieved a standard of living significantly higher than those standards
realized throughout the world.
(c) possessed few labor rights, privileges and protections, while being denied the right
to vote or organize.
(d) had a higher standard of living than workers in Europe but lower health
standards because of the rural, isolated conditions of colonial living.
With regard to the Navigation Acts (1651 and later amendments), all of the following
answers are true except
(a) No commodities originating from the Empire were to be shipped in any but
British (including colonial) ships.
(b) No commodities imported into the Empire were to be carried in any but British
ships.
(c) Only British subjects were allowed to be merchants in the colonies, and only British
ships were to carry commodities from one English port to another.
(d) There is no “except”; all of the above answers are true.
The long-term pattern of American foreign trade policy from 1789 to 1914 was
(a) protectionist at first, becoming more liberal before 1861, then more protectionist
again.
(b) liberal at first, becoming more protectionist before 1861, then shifting to greater
liberalism as the country’s industrialization spread in the later 19th century.
(c) free trade after the Civil War, but very protectionist in general before 1861.
(d) none of the above.
When interest rates rise, the price of bonds:
(a) Increases
(b) Decreases
(c) Stays the same
(d) can be determined.
Time on the Cross views slavery as a system in which
(a) the slaves were quite happy, good-hearted and content with their condition.
(b) the plantations were efficient operations with incentive systems providing slaves
with some rewards for productive behaviors.
(c) the slaves, because of the oppression and brutal conditions they faced, had the same
type of attitudes as did the inmates of Nazi concentration camps during World War II.
(d) the prospects of escape or resistance were so poor that slaves made few revolts
against slavery.
Farm prices fell sharply in 1919″21. Then, until 1929, the farm “terms of trade” (the
movement of farm prices relative to the movement of non-farm prices)
(a) collapsed by more than half.
(b) remained essentially unchanged.
(c) actually rose.
(d) collapsed, but only slightly.
Throughout U.S. history labor and physical capital have been
(a) input substitutes and complements.
(b) output substitutes and complements.
(c) product displacements.
(d) mixed outputs.
In the New England colonies,
(a) long winters, short summers, heavily forested areas, and rocky terrain contributed to
a lack of productive farmland; agriculture was a difficult, marginal activity.
(b) the great majority of New Englanders engaged in some type of subsistence
agricultural activity.
(c) most New England farmers subsidized their farm income with some other type of
income from another occupation to support themselves, save and invest.
(d) all of the above are true.
Banking failures result when
(a) banks do not hold 100 percent of their customers’ deposits in their vaults.
(b) banks make loans.
(c) bank withdrawals exceed their reserves.
(d) all of the above occur.
From 1865 to 1910, the U.S. share of world trade was
(a) nonexistent.
(b) miniscule.
(c) disproportionately small compared to the British.
(d) disproportionately high compared to the U.S. population.
Those individuals who rejected the U.S. tariff policy of the antebellum period did so for
which of the following reasons? They
(a) Wanted to save domestic jobs in those industries reliant on imports.
(b) Depended on imports for domestic production.
(c) Wanted to protect relatively low consumer prices, advance free trade and boost
economic efficiency.
(d) All of the above.
Land inheritance in the Southern colonies differed from inheritance in the Middle and
New England colonies in that
(a) primogeniture was more typical in the South.
(b) economies of large scale production were more important outside the South, which
discouraged the formation of large plantations.
(c) ownership of land was permitted by slaves outside the South but not in the South.
(d) none of the above; there were no major differences in inheritance between the
Southern colonies and the Middle and New England colonies.
Under the U.S. Constitution, individual states
(a) have no power.
(b) control laws regulating state businesses.
(c) benefit from the ability to borrow from other countries to finance taxes due to the
central government.
(d) regulate trade with foreign countries conducted in and by the state.
What is/are the central argument(s) against tariffs?
(a) They redistribute income away from consumers who are paying higher prices
because of the tariffs. These rents are given to the individual industries that are
protected by the tariffs and are operating inefficiently.
(b) A laissez-faire economy is the American way.
(c) They protect the wealthy.
(d) They benefit only fast-growing industries.
The practice of parents giving their children an amount of land similar to what they
received from their parents is known as a
(a) targeted bequest.
(b) strategic bequest.
(c) life cycle bequest.
(d) investment bequest.
The Western railroads had been granted vast amounts of land by the government.
Consequently, they
(a) Held on to it tightly.
(b) Produced a competitive market with homesteading.
(c) Wanted to profit only from providing railroad services.
(d) Hindered economic development by restricting new farms in the West.
Prior to the establishment of the Federal Reserve System (1913), reserve requirements
(a) limited the banks’ ability to lend.
(b) did not restrict the amount of paper-money issued by banks.
(c) freed banks to create as much money as the market could bear without regard for
risk and withdrawal rates.
(d) forced banks to place deposits in the national bank.