Econ 330 Mcgann Final Exam Questions
According to Karl Marx: A) Economies evolve through history when the relations of production conflict with the forces of production B) Slavery is an economic system that is inferior and less evolved than the hunting and gathering of a communal economy C) Capitalism is the least productive economic system and will "Sow the seeds of its own demise" D) All the above
A) Economies evolve through history when the relations of production conflict with the forces of production
Models of market socialism involve all but which of the following? A) Income and consumption equality B) Democracy C) Employee-run firms D) Market allocation of labor
A) Income and consumption equality
Which of the following was recently reported in the WSJ articles covered in class? A) Many Ukrainians are seeking better work opportunities in Poland B) The Brexit deal Prime Minister Teresa May engineered has succeeded and the UK is now outside the EU C) Venezuelan leader Nicolas Maduro has abdicated his position to the new leader Juan Guaido D) All the above
A) Many Ukrainians are seeking better work opportunities in Poland
Which country's leadership has been accused of the assassination of a Journalist inside a Turkish Consulate? A) Saudi Arabia B) Qatar C) Iran D) Yemen
A) Saudi Arabia
The _________ represents the principal and the __________ represents the agent: A) Stockholder, Board of Directors B) CEO, Board of Directors C) Board of Directors, Shareholders D) Citizens, Dictator
A) Stockholder, Board of Directors
If a new coal factory opens in a neighborhood and emits plumes of smoke into the air, which of the following is most accurate? A) The social cost exceeds the private cost B) The private cost exceeds the social cost C) There is a positive external cost D) The deadweight loss is zero
A) The social cost exceeds the private cost
Identify the country that is currently monetary instability under the influence of socialist dictator, Nicolas Maduro. A) Venezuela B) Holland C) Puerto Rico D) North Korea
A) Venezuela
Under planned socialism which of the following would the Central Planning Board most prefer? A) Vertical but no horizontal trust B) Horizontal but no vertical trust C) Horizontal and vertical trust D) Neither vertical nor horizontal trust
A) Vertical but no horizontal trust
Which of the following would be considered least important in defining an economic system? A) how high the corporate tax rate is B) how property rights are determined C) how information is disseminated D) how the public choice decisions are made
A) how high the corporate tax rate is
Capitalism is best defined by which of the following? A) individual property rights, material incentives, democracy, and decentralized information B) material incentives, centralized information, democracy, collective property rights with markets facilitating exchange between collectives C) collective ownership of resources, decentralized information, material incentives, and democracy D) material incentives, centralized information, individual property rights, democracy
A) individual property rights, material incentives, democracy, and decentralized information
Comparative Economics, in contrast to Comparative Economic Systems, studies: A) international economic indicators holding the economic system constant B) national economic indicators to determine the degree of socialism or capitalism that exists in a particular country C) the relationship between culture and economic growth controlling for population. D) economic systems holding macroeconomic variables such as GDP and inflation constant through the use of dummy variables
A) international economic indicators holding the economic system constant
Adam Smith would most likely agree with which of the following statements? A) "Greed is always good" B) "Markets are one example of individuals voluntarily coming together to improve their lives" C) "Greed is a natural right" D) "An all powerful state is necessary to contain the chaos of the market"
B) "Markets are one example of individuals voluntarily coming together to improve their lives"
Homo Soveticus, as applied in the Soviet Union, can best be exemplified by which of the following phases? A) "Each man must carry the weight of the world on his shoulders" B) "You are part of something bigger than yourself" C) "Work hard and you will reach your God-given potential" D) "Ambition is at the heart of individual greatness"
B) "You are part of something bigger than yourself"
The principal-agent problem is best exemplified by which of the following scenarios? A) A stockholder that owns shares of Apple invests in Microsoft and does not inform the board of directors B) A babysitter on duty invites her boyfriend over without telling the parents employing her C) An insurance agent earns a commision by selling an insurance policy to a client D) A member of the board of directors of a major corporation votes to lower the pay of the acting CEO
B) A babysitter on duty invites her boyfriend over without telling the parents employing her
Common law differs from Civil law in which of the following ways? A) Common law is man-made law; Civil law is government-made law B) Common law uses precedent whereas Civil law uses code C) Common law uses juries whereas Civil law uses judges D) Common law has its historical origins in the Roman Empire whereas Civil law has its origin in Great England
B) Common law uses precedent whereas Civil law uses code
Which of the following countries guide most of their economic activity by the principles of socialism: A) South Korea B) Cuba C) China D) India
B) Cuba
Which is the most consistent with the ideas of Karl Marx? A) A revolution must be undertaken to bring about Communism B) Economies evolve with or without revolution C) Socialism is the most advanced stage of economic evolution D) All of the above
B) Economies evolve with or without revolution
"Rules of the game" can also be described as economic: A) Directives B) Institutions C) In-directives D) Culture
B) Institutions
The moral philosopher most influential in the American style of economics and politics is? A) John Maynard Keynes B) John Locke C) Thomas Hobbes D) Milton Friedman
B) John Locke
Which of the following would be the best indicator for comparing the standard of living across different countries? A) GDP B) Per Capita GDP C) Longevity statistics D) GDP growth rate
B) Per Capita GDP
Which type of incentive is most likely to be used in a planned economy? A) Material B) Punitive C) Moral D) Adverse
B) Punitive
According to John Rawls, an individual behind the "Veil of Ignorance" would choose: A) Capitalism over socialism B) Socialism over capitalism C) Natural Justice D) Equality of opportunity, NOT outcome
B) Socialism over capitalism
The Great Moderation refers to: A) The thousands of years that man has strived to improve economic performance and escape subsistence living B) The period of the late 20th early 21st centuries that represent decreasing government involvement in many western countries and greater stability in economic performance C) The period of the late 20th and early 21st centuries that represents increasing government involvement in many western countries and greater stability in economic performance D) A period from approximately 1980-2007 when political leaders in the U.K., U.S., and Germany shift away from decades of fascist leadership to form a "Great Moderation" toward democracy
B) The period of the late 20th early 21st centuries that represent decreasing government involvement in many western countries and greater stability in economic performance
Which of the following is most accurate regarding the aftermath of the industrial revolution of the 18th and 19th century? A) Abject poverty has been eliminated in most of the western world but still exists in northern Europe and Japan. B) The ratio of global GDP produced by the Asian countries has shrunk relative to the west. C) Africa has experienced the greatest increase in per capita GDP due to their higher population relative to other areas of the world. D) While countries like the US and those of Western Europe have grown dramatically, subsistence living has remained the norm throughout the rest of the world.
B) The ratio of global GDP produced by the Asian countries has shrunk relative to the west.
The principal-agent problem can be represented by which of the following scenarios? A) a stockholder acts against the best interest of the board of directors B) a CEO acts against the best interest of the stockholders C) a student acts against the best interest of his teacher D) all of the above
B) a CEO acts against the best interest of the stockholders
The "Clash of Civilization" described by Samuel Huntington considers future wars to be: A) defined by culture within national boundaries B) defined by culture that transcend national boundaries C) unlikely given his "Ending of History" theory D) similar to the past but with greater use of nuclear weaponry
B) defined by culture that transcend national boundaries
Adverse selection and moral hazard are problems related to which of the following economic institutions? A) property rights B) information C) public choice D) incentives
B) information
Which of the following would be most important for a capitalist country to encourage investment in a broad array of new technology? A) high market capitalization B) strong venture capital markets C) volatile markets with a high degree of speculation D) impersonal banking system
B) strong venture capital markets
Promoters of planned socialism prefer greater collective influence over decision-making to counter capitalism's ____________. A) High mortality rates B) High material abundance C) "Unfair" income inequality D) Diminishing living standards of the poor
C) "Unfair" income inequality
"The ABC's of Communism" represents: A) A book that served as a refutation of Marxism and a strategy to advance the USSR from centrally planned to a more market-based economy B) A pamphlet to help households in Hungary better deal with the post WWII transition to communism C) A book whose primary objective was to inspire support for communism among workers D) An elementary school text used to indoctrinate students into Marxism at a young age
C) A book whose primary objective was to inspire support for communism among workers
Socialism can be best defined as: A) A political and economic system that rewards virtue rather than profit B) A political system that ensures authoritarian control over labor, capital, and natural resources C) An economic system that involves state of collective ownership of resources and a centralized means of distribution D) An economic system that involves distribution of goods via collectives known as "tribal communes"
C) An economic system that involves state of collective ownership of resources and a centralized means of distribution
the __________ represents the agent and the __________ represents the principal: A) Employer, worker B) Worker, Board of Directors C) Board of Directors, Shareholders D) President, Constituent
C) Board of Directors, Shareholders
Which of the following is a typical goal of socialism? A) Equality of wealth B) Equality of income C) Equality of consumption D) Political equality
C) Equality of consumption
Commanding Heights refers to which of the following? A) Capitalism and Democracy coexisting B) Fascism in Italy C) Government control over the major industries of an economy D) Policies under Stalin that embraced greater use of market forces
C) Government control over the major industries of an economy
Which of the following is the least objective metric of success in evaluating different economic systems? A) Gini coefficient B) Capital Utilization Ratio C) Happiness Index D) Income Per Capita
C) Happiness Index
The federal government mandates that sugary beverages be labeled as such so consumers can make more informed judgements about what to purchase. What coordinating mechanism is most represented by this mandate? A) Socialist policy B) Central planning C) Indicative planning D) Industrial policy
C) Indicative planning
Which of the following EU member nations recently became the first to sign on to China's Belt and Road Initiative? A) Germany B) Spain C) Italy D) Greece
C) Italy
In a planned economy which of the following is most likely to occur if there is a shortage of a product? A) Higher prices for the product B) Lower prices for the product C) Long-waiting lines for the product D) Inflation
C) Long-waiting lines for the product
Which of the following is NOT a likely justification for state intervention in the market? A) A Great Depression B) Markets may fail to produce goods that are nonrival and nonexcludable C) Markets may fail to produce goods that are rival and excludable D) Rich are getting richer and the poor poorer
C) Markets may fail to produce goods that are rival and excludable
The Soviet system was most like the US system in which of the following ways? A) Advancements in information technology B) Punitive incentives for those that did not work C) Material rewards for more productive managers D) Government influence over individual rights
C) Material rewards for more productive managers
An economy that is producing at its potential is most accurately represented as: A) Producing at 80% capacity B) Dynamically efficient C) Statistically efficient D) All the above
C) Statistically efficient
The False Consciousness of Capitalism suggests: A) The capitalist is inherently immoral and purposely acts to extract surplus value from the masses B) The capitalist is not inherently immoral but made to act as such due to the disproportionate power of the proletariat C) The capitalist is not inherently immoral but made to act so due to the superstructure of society D) Capitalists and workers are both inherently immoral and act to destroy the interests of the other but only the capitalist will succeed
C) The capitalist is not inherently immoral but made to act so due to the superstructure of society
Markets pursue an efficient allocation of resources in which of the following ways? A) When there are shortages, buyers compete, causing prices to drop B) When there are surpluses, sellers compete, causing prices to increase C) When there are surpluses, sellers compete, causing prices to drop D) When there are shortages, sellers compete, causing prices to increase
C) When there are surpluses, sellers compete, causing prices to drop
The economic system that endows property rights upon the individual but has significant government oversight and management over how individuals direct their property, is best labeled: A) political socialism B) social capitalism C) state capitalism D) market capitalism
C) state capitalism
Politically, which of the following countries identify as Marxist/Communist? A) Cuba B) North Korea C) China D) All of the above
D) All of the above
Countries that have grown intensively typically have ___________ when compared to countries that have only grown extensively. A) Higher levels of technology B) Higher standards of living per person C) Greater dynamic efficiency D) All the above
D) All the above
Which of the following are important questions that help define an economic system? A) Who can own land? B) Is political authority democratic or autocratic? C) Do consumers or government determine what gets produced? D) All the above
D) All the above
In his essay "The End of History" Francis Fukuyama contents: A) Western civilization will end as the result of a violent war of culture B) Communism will end by 2050 ushering in a new era of western liberalism C) Islam poses the greatest threat to our national identity and represents the "end of history" as secular and unbiased D) Capitalism represents the superior economic system that proved its viability upon the end of the Soviet Empire in the late 20th century
D) Capitalism represents the superior economic system that proved its viability upon the end of the Soviet Empire in the late 20th century
Which of the following is NOT a typical economic outcome pursued by modern nation-economies? A) Viability B) Stability C) Economic Growth D) Equality of Income
D) Equality of Income
According to Mises and Hayek's, planned socialism is inferior to free-market capitalism due to its: A) Militarist agenda that causes inevitable large-scale death and destruction B) Failure to protect voting rights and a free press C) Hard-budget constraints causing the over use of resources and productive inefficiency D) Inability to produce enough information for efficient economic decision-making
D) Inability to produce enough information for efficient economic decision-making
According to John Maynard Keynes: A) Redistribution of income is critical to creating an egalitarian income distribution B) There is a "leaky bucket" in redistribution of income C) Markets do not inherently create a business cycle D) The capitalist system is unstable, but government can use activist policies to manage it
D) The capitalist system is unstable, but government can use activist policies to manage it
Fukuyama's "End of History" is best described by which of the following? A) Cold War ending and capitalism losing the battle as the best economic system. B) WWII ending and the Nazi party advancing fascism. C) The Hyperinflation of Germany and the end of WWII. D) The demise of the Soviet Union and advancing of capitalism across the globe.
D) The demise of the Soviet Union and advancing of capitalism across the globe.
Suppose the US has a Gini coefficient of 0.75 and Austria has a Gini coefficient of 0.95. Which of the following statements is true? A) The distribution of income is more equal in the Austria B) The Lorenz Curve for the US is bowed further to the right C) Income distribution is relatively unfair in Austria compared to the US D) The distribution of income is more equal in the US.
D) The distribution of income is more equal in the US.
Organizational theory suggests "rules of thumb" will be used in which of the following circumstances? A) when acquiring information is costly B) when information is inadequate C) to deal with the principal-agent problem D) all of the above
D) all of the above
