Econ development final exam review
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?
"Producers in the South objected to tariffs placed on imported goods. They needed them at relatively low prices for their own production."
western expansion put whites on a collision course with the indigenous people of north America. the major policy of the US government was to
"civilize" them by replacing tribal social structures and values with those more appropriate to white society, such as individual ownership of property, competitive striving for material gain, farming activities for Native American men and housekeeping for Native American women and the replacement of native languages with English among children.
the interstate commerce commission
- established to regulate railroads, the regulation the public demanded -first permanent independent federal regulatory agency - initially lacked power to set railroad rates, but its founding marked the beginning of a federal power
Intermediation entities include which of the following
- mutual saving banks - stock exchanges -life and fire insurance policies
Developments which marked the beginning of the modern period of western Europe around year 1500
- the protestant reformation - the rise of nation states and the decline in power of the feudal nobility - creation of national markets, commercial growth and exploration abroad
the emphasis upon export surpluses in mercantilism theory
- thought to be good by business people because it meant more money circulating -thought to be a good thing by govt cause it created brisk trade which gave higher tax revenues -is also called the "beggar-thy-neighbor policy" and a "favorable" balance of trade
which of the following would empirically support the claim that slave owners were optimistic about the future of the slave system in the 1850's
-an increasing demand for slaves -rising slave prices -a positive net return to slave purchases
Those individuals who rejected the US tariff policy of the antebellum period did so for which of the following reasons
-depended on imports for domestic production -wanted to protect relatively low consumer prices advance free trade, and boost economic efficiency -wanted to save domestic jobs in those industries reliant on imports
government regulation in the form of subsidies tariffs, licensing, and inspections does which of the following
-encourages the inefficient use of productive resources -offers profits to some businesses at the expense of others -creates rent for businesses
Producers of goods and services suffered during the American war in which sectors
-fishing, whaling, and shipping -manufacturing and agriculture -exports and imports
By 1860,
-immigrants supplied a significant amount of labor to northern and southern farmers -less than 1/3 of southerners had slaves -most of the workers on northern farmers were hired laborers
today, the federal reserve system can contract the money supply by
-increasing the discount rate -increasing reserve requirements -selling US treasuryand federal agency
Economic historians do not believe that there was a shortage of money in colonial America for what
-interest rates not unreasonably high -long term prices -the colonial economy was growing in real terms
factors of the civil war
-slavery -shift of political power resulting from new states entering - the conflict between the two systems of agriculture
why was the stock market crash of 1929 a disaster for the economy
-wealth effects, investors lost paper wealth -businessmen became pessimistic about the future and reduced spending on plants and equipment - the crash revealed a flawed structure of credit and weak system of banks and other financial institutions in the US
the growth of cities was due to the existence of importance of scale economies, which doesn't include
Crime, congestion, and pollution
which of the following was a key factor which pushed the nation close to civil war?
Dred scott Vs. Sanford supreme court case
Colonists supporting the American revolution (1775-1781)
Faced lower transportation and communication costs than the british during the war
the disposal and settlement of the public lands, according to hughes and cain (2011)
Had both intended and unintended consequences
American history actually is a study of
How a small, inconsequential economy through a series of successes and failures
American economic history is important because it will help you understand
How to change strategically the course of the future since It is shaped by the past
what were the two main sources of population increases during the antebellum period?
Immigration and a natural increase in population
Land inheritance in the southern colonies differed from inheritance in the middle and New England colonies in that
In the South, the large slave plantations had to be regranted by the colonial government after the death of the owner, usually to the eldest son, but this was not required outside the South.
_____ referred to the entrepreneurial role as "creative destruction"
Joseph Schumpeter
Which group of economists argues that the stock market crash of 1929 significantly reduced wealth, causing consumption to fall and resulting in a significant downturn in residential construction and investments?
Keynesian economists
Many of the founding fathers considered the emancipation of slaves to be
Less important than the issues of whether blacks should be prevented from coming to the US and whether freed slaves should be deported
The police powers of the government include
Licensing, inspection, price fixing
The Navigation Acts (1651 and later amendments) were part of the contemporary European commercial policy theory called
Mercantalism
_______ improvement of the "choice of technique" argument
Nathan Rosenberg
All but which of the following people supplied labor in colonial America
Native americans
___ developed models of urban systems in which economies of scale at the firm level, transportation costs, and factor mobility interact to produce a system of cities
Paul Krugman
the dred scott v. Sanford decision of the US supreme court in 1857
Prevented slaves from being taken away from their owners without due process
Land Ownership or land tenure in colonial America was primarily acquired by settlers through
Purchase or otherwise legal transfer of deeds from colonial officials who received their rights to the land form the king
____ measured the amount of industrial as the replacement values of physical plant, equipment, machinery, and unsold inventories
Sumner slichter
With regard to indentured servitude
This institutional arrangement benefited all parties entering the contract
What impact did colonial inflation have on the colonial economy
a decrease in colonial exports and a rise in colonial imports
when world war 2 (1941-1945) came,
a large increase in the labor force occurred in all categories including men over 65 and women
an export industry is said to exhibit increasing returns to scale when
a large-scale organization has significant competitive advantage over small-scale activities
on the farm, which of the following people had the highest labor value
a man
unlike the person or persons who formally form a sole proprietorship or partnership, a corporation has
a perpetual life
which of the following describes the full employment act of 1946
a piece of the new deal legislation that had to be postponed until after the war
Some researcher argue the American revolution was probably inevitable. the most important factor is
a series of revenue-raising measures imposed on the colonists at the end of the French and Indian War for the purpose of making the colonies more self-supporting.
Consistent with the mercantilist theory, the colonies
a trade deficit with england
Andrew carnagie dominated the steel industry on the basis of the Bessemer convertor. this technology permitted inskilled men to produce large quantities of steel at relatively low costs
acquired legally from the british inventor in bessemer
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)
actually rose
fractional reserve banking
allows banks to create money while requiring them only to hold a fraction of money
The evidence indicates that during the 1770s the American colonists were
among the most lightly taxed people in the European world
The American revolution and constitution represented the transition to modern liberalism or
an emphasis on free enterprise and competitive individualism and a limited role for government
Most towns were initially established at locations with
an excellent harbor and river stretching into the hinterland
between 1945 and 195=, the US price level rose by one third. this increase was complemented by
an increase in nominal and real GDP
the energy source most often used by the earliest factories was
animal power
in the pivotal supreme court decision Munn vs. Illinois
any business, whether or not a natural monopoly, or whether or not it was an interstate commerce, may under certain circumstances be subject to gov't. regulation
from an ethical standpoint, the plantation owners of the south typically saw the system of slavery as
basically superior to the wage-labor system of the North
during the decade of the 1920'3 , the distribution of income
became increasingly unequal
during the antebellum period, most international payments were made by
bills of exchange
which of the following was a source of the us federal gov't. financial revenue for ww2
bond sales to the federal reserve system
the majority of americans at the end of the colonial period were
british
Greenbacks were first issued
by the federal government to help pay for the civil wat (1861-1865)
who doesn't want a tariff
consumers of imported goods
under the US constitution, individual states
control laws regulating state businesses
on the eve of the civil war, what was the number one export in the US
cotton
once the problem of subsistence food growing had been solved, regional growth resulted in which of the following
developed export activity
early nineteenth century banks primarily
enabled small savers to buy shares in a diversified portfolio of investments
the land ordinances of 1785 and 1787 accomplished which of the following
established the foundation for the future American capitalism by permitting land to pass into private hands
Between 1790 and 1860, wholesale prices charged by producers of commodities
exhibited wild variations, but decreases on average
economies of scale result as a firm increases in size and expands its use of resources. productivity increases and fixed production costs are spread over an increased number of goods and services. what is a type of economy of scale
external economies
those closest to fomenting a real revolution during the early years of the great depression were
farmers
when the government increased spending during the 1930s in an attempt to create jobs and end the great depression, it provided an example of expansionary
fiscal policy
By almost every measure of social and economic well-being, for how long after the civil war (1861-1865) did the south lag behind the rest of the country
for almost a century
in the first years of the new nation, American producers
found it difficult to compete with the british in manufactured goods
The system of sharecropping that emerged after the civil war (1861-1865)
gave neither the owners of land nor the sharecroppers strong incentives to make improvements in agricultural production
regarding slavery the constitution...
gave slavery legitimacy and support
what is the total money value of all goods and services evaluated at market prices called
gross domestic product
there is statistical evidence to suggest under English rule, colonists experienced
growth and prosperity
in general, in the 19th century, America
had a moderate level of tariffs, compared with England, whose main purpose was to provide the federal government with revenues
in the 1800s, early agricultural activity in the US used the technology of the time which was based on
handwork and animal power
by the end of the colonial period in the us history, slaves in the colonies
helped meet a labor need
conrad and meyer (1958) found evidence to support the claim that the annual rates of return to slave agriculture were
high enough to attract investment funds away from other alternatives in the cotton south
With the regards to incomes at the time of the revolution
incomes in colonies were higher than in England, especially after tax incomes, cause of relatively light taxation of colonists
some researchers argue that the overall standard of living increased during the 1920's. in general, holding constant all other factors that might impact it, economists are careful about connecting an increase in standard of living to
increase in the output of goods and services per worker
Keynesian economics endorsed the idea of
increased gov't. spending as a counterforce against slumps or recessions
the new deal reduced
individual liberty
the turnpikes built in the early 1800's were
intercity toll roads
Caveat Emptor
is essentially the only rule with regard to buying and selling in our economy that is consistent with the concepts of freedom and liberty enshrined in our Constitution.
which statement best describes the railroad
it is a good example of "technology transfer" (from England to US)- the first operating railroad was in England
which of the following statements holds true for eminent domain?
it supports rent-seeking where some individuals gain and others lose
policy of the British towards people squatting
it was discouraged by the colonial officials and had to have formal transfer from the British Crown
what best describes white servitude
it was pervasive on tobacco, indigo and cotton plantations.
what was the single largest component of wealth in colonial america
land
in 1820, when the nation began its westward movement in earnest, the median American was
less than 17 years old
the constitution helped establish a secure and well-defined system of property rights and rights of person because it did which of the following
let market forces, not government, set prices on the sale of land among private citizens
if children can be considered durable goods, then this would help explain
lower birth rates in towns than In the countryside
he constitution contains a provision that states that no laws shall be passed "impairing the obligation of contracts" This provision
meant that English common law was legislated for the new republic
The middle class ideal that developed in the early 19th century included which of the following elements
men were to be the income earners providing for the for the family's material needs while women were to play a greater role regarding the family's spiritual needs
historically, price discrimination was aggressive behavior exhibited by
monopolists
When land across the mountains became available in the early nineteenth century
much of New England was simply abandoned by people primarily interested in farming.
by 1913, steel making by Bessemer converter had been completely surpassed by
open hearth furnaces
the perceived specie shortage led colonists to invent
paper money
The comparative advantage of the south was in
plantation agriculture producing for export
between independence and the civil war, American population growth was
positive and rapid
In colonial America, the average wage laborer
possessed few labor rights, privileges, and protections. while not being able to vote
western expansion contributed to US growth and development of the economy by
privately mobilizing idle natural resources and land
if the relative market price of producing cotton is more than the opportunity cost of producing it in the south
producers will increase the supply of cotton in the long run
slaves were
profitable complements to capital equiptment
the perfectly discriminating monopolist will produce the
quantity at which marginal revenue equals marginal cost
which of the following illustrates the economic inefficiencies of government regulation
railroad rate increases are set by a gov't. agency and these increases fall below increases in repair
which transportation industry did government invest most heavily in before 1860?
railroads
in the process described as Schumpeterian economic growth
recessions are considered to be useful cleansing devices for abandoning inefficient uses of economic resources
population grew prodigiously during the colonial period. what was the most important factor fueling this increase
relatively low mortality and high birth rates
___ estimated GNP at market prices
simon Kuznets
consumption patterns in the US between 1790 and 1860 indicate a growing preference for
simple, standardized and mass-produced goods
the economics of slavery suggests that
slave labor slaves produced efficiencies in Southern agriculture
Farming in the New England colonies tended to be
small scale and worked by members of the family
The economy of the northern colonies, in particular New England, was largely based on
small-scale farming
private initiative and financing were most important in
steamboat system
When the English pound appreciated against a colonial currency, this signaled
that colonist needed more colonial currency to buy an English pound
the civil war (1861-1865) was the root of which modern-day beliefs?
the 13th amendment of the constitution, which prohibits slavery and involuntary servitude in the US
during the international crises of 1837 and 1857
the US and England were connected financially
which view of the great depression emphasizes that the 1920's were a time of significant inflation, averaging 6.5%
the austrians'
who does inflation benefit
the government
what was the crucial factor permitting cotton textile production to take off in new England between 1790 and 1815
the imposition of hightariff rates
which view of the causes of the great depression emphasizes the decline in the money supply which caused aggregate demand for goods and services to shrink, leading to businesses to cut production and employment?
the monetarists
the federal gov't. ability to tax during the war and peace times are constrained by
the need to be re-elected by the voting population
Scholars of surnames provides the necessary information
the study of surnames provides the necessary information
what is the from the independence period in 1860
the systems of slavery flourished because the relative price of slaves fell consistently.
Did the civil war help promote economic growth and industrialization?
the war rather than being a major stimulus to industry, was actually a great drain that slowed US economic development for a time
according to the quantity theory of money (chapter 3) the increase in the money supply from 39.7 billion in 1940 to 99.2 billion in 1945 should have fueled strong inflation, but it didn't because
the ww2 economy was operating below full employment levels of production
railroads had advantages over canals in all respects except
there is no except, all were advantages of railroads
the industrial revolution was centered in great Britain, and the british
tried to achieve a technological monopoly
shortly after ww2 and the price controls ended
unemployment levels returned to their fill employment levels
distribution of income and wealth in colonial America was
unequal in about the same degree as in modern America
In colonial America, work
was thought to be for the "colored" races, with white folks exploiting their labor.
fogel and engerman (1974) are generally of the opinion that American slavery
was thriving and profitable in the decades prior to the civil war
by 1774 the southern colonies
wealth per capita was the highest
unlike federal reserve bank of today, the First and Second Banks
were direct competitors with private business
between 1921 and 1929, general prices as measured by wholesale or consumer prices
were stable overall
inflation results
when too much money is chasing too few goods
