Econ 2200 Midterm Quizzes

cotton goods; machinery

#1 According to the text, the largest US industry (as measured by value added) was _____ in 1860, and it was _____ in 1910. boots & shoes; iron & steel cotton goods; machinery wagons & carriages; railroad cars flour & meal; men's clothing

only gold will circulate as money.

#1 Assume a bimetallic standard in which the mint ratio (silver:gold) has been set at 12:1. If the market ratio is currently 10:1, then: only gold will circulate as money. only silver will circulate as money. both gold and silver will circulate as money. neither gold nor silver will circulate as money.

obtaining a short-term loan from the central bank.

#1 In the late-1800s, options for a commercial bank experiencing a run included all of the following EXCEPT: selling bonds. obtaining a short-term loan from the central bank. limiting or suspending cash payments to depositors. calling in loans and reducing the bank's total loan portfolio.

trusts

#1 In the late-1800s, some firms created _________ , which were agreements under which stockholders of various, competing companies turned over their shares to a group that exercised voting control over the companies. pooling arrangements holding companies trusts gentlemen's agreements

All of the above.

#1 Int the 1870s, cotton prices were declining. the Deep South became a food importing region. an increasing percentage of small farms specialized in cotton. black farmers devoted more of their land to cotton than white farmers. All of the above.

resources were transferred to companies that could take advantage of economies of scale.

#10 According to Gary Libecap and Ronald Johnson (1979), one positive outcome of the fraud that often allowed large companies to obtain land intended for homesteaders was: conflicts between farmers and railroads were reduced. resources were transferred to companies that could take advantage of economies of scale. fines charged to fraudulent companies provided substantial revenues for the federal government. legislators friendly to economic development were elected because of backing from the fraudulent companies.

may regulate the prices charged by certain types of private businesses.

#10In Munn v. Illinois (1877), the US Supreme Court held that states: cannot issue paper currencies. cannot enact laws that interfere with interstate commerce. may establish loan programs for farmers within their borders. may regulate the prices charged by certain types of private businesses.

d.increase; 7

A firm is experiencing economies of scale if it increases all inputs by 5 percent and this causes output to ______ by _____ percent. a.decrease; 9 b.decrease; 4 c.decrease; 5 d.increase; 7 e.increase; 2 f.increase; 5

False

A producer should specialize in the production of the good that commands the highest price in the market. True False

greater than its marginal cost.

A profit-maximizing monopoly charges a price that is greater than its marginal cost. less than its marginal cost. equal to its marginal cost. equal to its marginal revenue.

d.$17.63 trillion; $7.277 trillion

According to the CIA World Factbook, in 2014 China's GDP equaled _______ ,and India's GDP was ______ . a.$6.63 trillion; $5.44 trillion b.$13.39 trillion; $4.96 trillion c.$13.65 trillion; $7.14 trillion d.$17.63 trillion; $7.277 trillion

increases in nominal GDP.

According to the Quantity Theory of Money (QTM), increases in M can cause: decreases in V. decreases in Y. decreases in P. increases in nominal GDP. All of the above.

d.17.5

According to the Rule of 70 if the growth rate of real GDP is 4 percent per year, real GDP will double in about ____ years. a.4.3 b.5.7 c.10 d.17.5 e.28 f.40

d.almost 50%

According to 2007 data presented in your textbook, the richest 20% of American households received _____ of total income. a.less than 20% b.35% c.just under 40% d.almost 50%

continuous flow operations were cost minimizing only if the the inflow of inputs and the sale of output proceeded without interruption

According to Alfred Chandler, large vertically integrated firms dominated much of American manufacturing in the early-1900s because: U.S. tax laws created strong incentives for vertical integration. U.S. manufacturers were emulating the production practices of European manufacturers. larger firms were better able to fight labor unions and collective bargaining agreements. continuous flow operations were cost minimizing only if the the inflow of inputs and the sale of output proceeded without interruption All of the above.

inflation.

According to Economic Insight 19.1, the Fisher effect states that the variable "i" tends to increase after _____. a war. inflation. a decrease in M. an increase in GDP. All of the above.

$0

According to Figure 19.1, what was the value of silver dollars and silver certificates in circulation in the US in 1860-1875? $0 about $100 million between $200 million and $300 million over $300 million

fell; fell

According to Figure 19.2, wholesale prices generally _____, and the cost of living generally _____ between 1865 and 1900. fell; fell rose; rose rose; fell fell; rose

76 percent

According to Table 19.2, US prices rose by _____ between 1861 and 1865. almost 10 percent 29 percent 76 percent over 200 percent

All of the above.

According to an article by Jonathan Hughes, Andrew Carnegie's innovations included the introduction of: accounting in his iron works. chemistry in blast-furnace operations. modern techniques for marketing iron and steel. successful methods for identifying and retaining management talent within the firm. All of the above.

1875

According to data in Table 15.4, US farmers experienced adverse terms of trade in all of the following years EXCEPT: 1875 1885 1890 1900

5.4; 10.8

According to data presented in the text, in the US between 1860 and 1910, the total manufacturing labor force expanded by a multiple of _____, and total manufacturing output expanded by a multiple of _____. 3.4; 6.8 5.4; 10.8 6.0; 15.2 23.2; 17.1

real interest rates were falling.

According to evidence on midwestern farm mortgages 1870-1890, real interest rates were falling. nominal interest rates were rising. real interest rates were less than nominal interest rates. interest rates were lower in the western US than in the eastern US. All of the above.

b. False

According to the syllabus, each module includes 2 quizzes and 1 written assignment. a. True b. False

d. the weight of Exam 1 will be added to a mandatory comprehensive final exam.

According to the syllabus, if a student is unable to take a Exam 1 ________ . a. he/she will be given an essay-style version of Exam 1 at the end of the semester. b. he/she will be allowed to complete Exam 1 once written documentation explaining the absence is provided to the instructor. c. he/she will be given the option of writing a term paper which will be weighted the same percentage as Exam 1. d. the weight of Exam 1 will be added to a mandatory comprehensive final exam.

decrease; burning greenbacks

After the Civil War ended, many Republicans supported a plan to ______ the price level by ______. increase; increasing real output increase; suspending payment in specie decrease; burning greenbacks decrease; maintaining a stable money supply

False

As interest rates on Treasury bonds rose in the late 1800s, national banks increasingly made loans by issuing bank notes rather than demand deposits. True False

a.choices impose costs.

As noted in Chapter 1 of your textbook, a fundamental proposition of economic reasoning is that: a.choices impose costs. b.wealth generates income. c.preferences are inherently unstable. d.markets always yield efficient resource allocations. e.All of the above

decreases; increases

Assume that (1) labor supply is perfectly inelastic (vertical), and (2) immigrants and skilled labor are complements. Given these assumptions, an increase in unskilled immigrant labor ______ the real wages of unskilled labor and _____the real wages of skilled labor. increases; increases increases; decreases decreases; increases decreases; decreases

rose; also rose

Data show that in the US between 1860 and 1920, the number of farms _____, and the number of acres under cultivation _____. rose; also rose rose; fell fell; rose fell; also fell

West Virginia

Between 1879 and 1899, the average annual growth rate in per capita income in ______ was higher than the US. average rate. Alabama Georgia North Carolina West Virginia

c.University of Georgia

Dr. Moore received her doctorate in economics from: a.Auburn University. b.Radford University. c.University of Georgia d.Washington University in St. Louis.

decreasing the growth rate of the money supply.

During periods of strong economic growth, countercyclical monetary policy can be exercised by: increasing the tax rate. lowering interest rates. decreasing the growth rate of the money supply. reducing government spending on goods and services. All of the above.

False

During the Reunification era, shareholders of most corporations were personally liable for debts incurred by the firms in which they owned stock. True False

temporarily reduced the burden of existing farm debt.

Economic analysis of the US agricultural sector in the late-1800s indicates that reflation would have: increased farmers' real incomes. improved farmers' terms of trade. decreased the world supply of agricultural products. temporarily reduced the burden of existing farm debt.

loans; the money supply

Economists often note that in a fractional reserve system, commercial banks tend to "starve recessions." Thus, during recessions commercial banks tend to decrease _____, which causes decreases in _____. velocity; real output loans; the money supply interest rates; liquidity reserves; the price level All of the above.

False

Economists use the term "capital" to describe stocks, bonds and other financial assets. True False

True

Even though the open hearth method was less costly than the Bessemer method, the Bessemer method dominated the steel industry in the late-1800s. True False

a.government spending.

Fiscal policy includes changes in a.government spending. b.the money supply. c. the discount rate. d. the reserve requirement. e.All of the above.

do not change

Fixed costs ______ as output increases. increase decrease can rise or fall do not change

an employer's right to require that employees sign "yellow-dog contracts" was protected by the 14th Amendment.

In Coppage v. Kansas (1912), the Supreme Court held that: all employers were required to offer employees the option of joining a union. an employer's right to require that employees sign "yellow-dog contracts" was protected by the 14th Amendment. unionized firms must negotiate with the union regarding workers' wages, but the firm was not required to negotiate workers' hours. using federal troops to break strikes was a legitimate use of police power. All of the above.

False

Holding other things constant, a good's price elasticity of demand decreases as the number of substitutes for the good increases. True False

b. demand for; decrease

In Module 1.2, we reviewed data that show income convergence across regions in the U.S. Convergence is partly the result of capital migration, which typically causes the _____ labor to _____ in the capital-exporting region. (HINT: Remember that capital and labor are complements in the production process.) a.demand for; increase b. demand for; decrease c.supply of; increase d.supply of; decrease

4%

If the nominal interest rate on a loan is 7% and the expected inflation rate is 3%, then the real interest rate equals _____. 0.42% 2.3% 4% 10% 21%

the number of state banks had increased dramatically.

In 1865, Congress raised the tax on state bank notes to 10 percent of the value of notes in circulation. Quantitative evidence shows that by 1900, state banks had ceased to exist. the number of state banks had declined dramatically. the number of state banks had increased dramatically. the number of state banks was roughly the same as in 1865.

owned about the same portion of Southern land as they owned before the Civil War.

In 1870, the wealthiest 20% of Southerners: owned about 25% of Southern land. had lost most of their land through post-war land reforms. owned about the same portion of Southern land as they owned before the Civil War. generally chose to reduce their investments in land and increase investments in other assets.

the size of the firm relative to other firms in the same market.

In 1911, the Supreme Court ordered the dissolution of both Standard Oil Co. and American Tobacco Co. In these decisions, the Court held that all of the following were grounds for antitrust violations EXCEPT: the use of price wars to weaken competing firms. the use of monopsonistic power to drive down input prices. predatory practices that occur in a firm's growth period. the size of the firm relative to other firms in the same market.

All of the above.

In the Reunification era, U.S. firms grew in size and complexity. The growth of "big business" was encouraged by: decreasing real interest rates. expansion of the investment banking sector. limited regulation of businesses by the federal government. concentrations of workers and consumers living in cities. All of the above.

investment; commercial

In the Reunification era, large firms in the US relied heavily on _____ banks to support expansion. Large firms in England typically relied on _____ banks to support expansion. commercial; commercial investment; investment commercial; investment investment; commercial

False

In the late 19th century Southern crop lien laws led to under-production of cotton. True False

increased; increase

In the late-1800s, the demand for money typically _____ during the fall harvest season, which caused interest rates to _____ . decreased; decrease increased; increase increased; decrease decreased; increase

a. data

In the online presentation about quotes from William Parker (1986) and Walton & Rockoff (2009), we noted that history is useful to economists because it provides ______ that can be used to test hypotheses about economic relationships. a. data b.theories c.rhetoric d.linear estimators e.All of the above

All of the above.

In the years between the 1896 election and the passage of the Gold Standard Act in 1900, US exports increased. US real GDP increased. the US money supply increased. the US price level rose. All of the above.

men's clothing

Of the industries listed in Table 17.5, _____ was the fastest growing between 1860 and 1910 in terms of value added per worker. men's clothing cotton goods machinery iron & steel boot & shoes

a.electricity

Often, new inventions don't generate meaningful productivity gains until businesses learn how to use them. For example, Paul David's (1989) research has shown that this was the case for the invention of _______. a.electricity b.water turbines c.air compressors d.lithium batteries e.All of the above

True

Producers that specialize in the production of a particular good are more vulnerable to price fluctuations. True False

the creation of a central bank responsible for serving as a lender of last resort.

Provisions of the National Bank Act of 1863 included all of the following EXCEPT: the creation of a currency with a standard design. a mandated legal reserve requirement for banks chartered under the Act. the creation of a central bank responsible for serving as a lender of last resort. the requirement that banks chartered under the Act purchase a certain amount of Treasury bonds.

short hauls of western freight.

Robert Higgs (1970) finds some evidence of monopoly pricing for: short hauls of western freight. farm equipment. grain elevator services. wood and kerosene.

e.19th

The CIA World Factbook is a great source for locating economic development data for any country. It has a "Country Comparisons" tool that allows you to compare data on an invidual variable for many countries. Using this tool, we find that U.S. per capita GDP ranks _____ compared to that of other countries. a.1st b.2nd c.7th d.14th e.19th f.22nd

All of the above.

Sharecropping: gave freed slaves more control over their workday. allowed tenants and land owners to share risks and returns of farming. gave land owners an incentive to share information with tenants. gave tenants an incentive to ignore long-term investments in improvements of farms. All of the above.

b.2

Since 1870, the long-term trend in the annual growth rate of US real per capita GDP has has been about _______ percent. a.1 b.2 c.3 d.4 e.5

e.the invention of new technology.

Sources of productivity growth include all of the following EXCEPT: a.discoveries of mineral resources, such as coal. b.improvements in accounting methods. c.better nutrition and healthcare for workers. d.education & training of workers. e.the invention of new technology.

P > ATC

Suppose that Firm A produces the profit-maximizing level of output. Using notation from Module 3, we know that Firm A will earn an economic profit if: P = MR AVC > AFC P > ATC MC > 0 All of the above.

rises; less than

Suppose the demand for a good is price inelastic. Thus, when price falls by 10 percent, quantity demanded ________ by ________ 10 percent. falls; less than rises; less than falls; greater than rises; greater than

True

The Aldrich-Vreeland Act (1908) provided for the creation of National Currency Associations, which were empowered to issue emergency bank notes backed by Treasury bonds and other assets. True False

The Federal Reserve's Board consisted of 7 members, including the Secretary of the Treasury.

The Federal Reserve Act was signed by President Wilson in 1913. Which of the following statements provides accurate information about the provisions of the Act? Only nationally-chartered banks were allowed to become members of the Federal Reserve system. The Federal Reserve's Board consisted of 7 members, including the Secretary of the Treasury. Federal Reserve district banks offered commercial loans to private businesses at reduced interest rates. All Federal Reserve District Bank directors had to be associated with the local banking community. All of the above.

the available land was best suited for grazing livestock, but 160-acre plots were too small to do so profitably.

The Homestead Act was passed in 1862. However, only about 20 percent of newly-added farm land between 1870 and 1900 belonged to homesteads because: a treaty between the U.S. government and Native Americans prevented homesteaders from acquiring most of the land. the available land was best suited for grazing livestock, but 160-acre plots were too small to do so profitably. homestead filing fees were gradually increased during this time period. Americans were more interested in moving to cities than to homesteads.

decreases in the average cost of refining operations.

The MAIN source of Standard Oil's profits in the late-1800s and early-1900s was technological improvements that increased productivity. the discovery of oil wells in the midwest. decreases in the average cost of refining operations. steady increases in the price of the firm's products.

the dollar-to-pound exchange rate was roughly equal to its value before the Civil War.

The US resumed specie payment in 1879. According to data presented in your text, at this time: gold was flowing out of the US. England was experiencing rapid inflation. US exports were lower than they had been during the Civil War. the dollar-to-pound exchange rate was roughly equal to its value before the Civil War. All of the above.

e. All of the above

The course outline includes ______ for each module. a. topics b. readings c. assignments d. learning objectives e. All of the above

False

The income elasticity of the demand for food is less than zero. True False

False

Unanticipated deflation typically harms lenders and benefits borrowers. True False

total value of output - material costs

Value added equals: price - marginal cost price X quantity of output cost of labor + cost of capital total value of output - material costs

less than

When a firm is operating at excess capacity, its output is ________ the output associated with minimum long-run average cost. less than greater than equal to slightly above or below, but not equal to

more; increases

When the Coinage Act of 1873 was passed, silver was worth _________ on the market than at the mint; however, subsequent __________ in the supply of silver led to public outcry over the "demonetization" of silver under the Act. more; increases less; increases more; decreases less; decreases

c. 3.5; 10

When the Nixon-era price controls were imposed in August 1971, the US inflation rate was ____ percent. Following the complete lifting of price controls in early 1974, the US inflation rate was _____ percent. a. about 12; over 12 b. 5; still 5 c. 3.5; 10 d. 6; 3

the purchase of E.C. Knight Company by American Sugar Refining Company

Which of the following is an example of a horizontal merger? the consolidation of marketing, processing and purchasing departments by Armour Meat Company the purchase of iron ore mines by the Carnegie Company the purchase of E.C. Knight Company by American Sugar Refining Company Singer Sewing Machine Company's acquisition of retail outlets

Growth rates in per capita income were positive, but small.

Which of the following statements correctly characterizes farm incomes in the second half of the 19th century? Real per capita income fell. Growth rates in per capita income were positive, but small. The rate of growth in real income per worker was negative. Nominal per capita income fell, but real per capita income remained unchanged.

d.World population was relatively small until 1750, then it increased extremely rapidly.

Which of the following statements provides the most accurate description of world population growth? a.World population has increased steadily during the past 6,000 years. b.World population has exhibited significant cyclical patterns of growth and decline. c.World population was small until after World War II, when it increased very quickly. d.World population was relatively small until 1750, then it increased extremely rapidly.

a.height

Which of the following variables has been shown to be highly correlated with nutrition, disease and income, and is increasingly being used by economists to measure the well-being of people? a.height b.gender c.weight d.IQ