WHOLE STUDY SET

Why would you not want to produce with a reaper if you had a small farm? A farmer would not be able to produce enough to sufficiently pay down the high fixed costs of buying a reaper A farmer would be down with their fields too quickly and have too much free time on their hands A farmer would have to work extra hours with the reaper in order to clear their field A farmer wanted to make sure their kids grew up working hard

A farmer would not be able to produce enough to sufficiently pay down the high fixed costs of buying a reaper

What is money? Anything that is processes by a bank Anything issued by the government for payment of public debts Anything that is generally accepted for payments Anything that is backed by gold/silver

Anything that is generally accepted for payments

Which of the characteristics is not a key property of money in all places and periods? Generally accepted for payment Does not lose value quickly Widely used to set a single menu of prices Backed by gold/silver

Backed by gold/silver

Gresham's Law states ______? Bad money drives out good money Government currency always circulates Good money drives out bad money Competing types of money makes the system more efficient

Bad money drives out good money

Which of the following would decrease the deposit multiplier? The government decreases the reserve requirement Banks holding more money as reserves People begin trusting the banking system much more People holding less money out of banks

Banks holding more money as reserves

The discount window at the Federal Reserve provides a place for _______? Banks to print their own bank notes during panics Banks to purchase or sell Treasury bonds Individuals to withdrawal cash from their Fed accounts without getting out of their car Banks to borrow from the Fed if they need short-term liquidity

Banks to borrow from the Fed if they need short-term liquidity

Which of the following best describes the reason for the high failure rate of free banks relative to other banks? Wildcat banking Collapse of state bond prices Panics of 1837, 1839, and 1857 Lack of bank supervision

Collapse of state bond prices

Which of the following inputs became the most important for agricultural output during the 1900s? Capital Labor Land Fertilizer

Fertilizer

Which of the following was not a key emphasis of the "American System"? Focus on highly skilled labor Large scale output Simplicity of design Standardization

Focus on highly skilled labor

Why is more growth not always better? -Growth leads to economic inequality which makes some people worse off -Growth can sometimes leads to externalities that hurt individuals that were not party to the growth -Growth leads to the betterment of individuals -Growth leads to economic development

Growth can sometimes lead to externalities that hurt individuals that were not party to the growth

While both Jefferson and Hamilton want a rectangular land registration system, who initially won out in terms of prices for government land? -Jefferson -Jackson -Trump -Hamilton

Hamilton

How is economic development different from economic growth? -Economic growth takes into account size differences between countries, while economic development does not -Economic growth measures total output growth while economic development measures output growth per person -Economic growth accounts for the quality of institutions, while economic development only measures production -Economic growth measures total output growth while economic development measures the growth of peoples' well-being

Economic growth measures total output growth while economic development measures the growth of peoples' well-being

Estimates suggest that southern plantations were about 37% more efficient than northern farms. Which of the following factors was not a main contributor of this? Economies of Scale Economies of Scope Specialization Forced labor

Economies of Scope

In the absence of a federal banking regulation, the Suffolk Banking System was a private entity that stepped in to facilitate the use of bank notes. How did they achieve this? Established relationships among banks and forced them to redeem each other's notes at par Were given power by state legislatures to punish banks whose notes traded below their par value Purchased stock of other banks in order to control their actions Issued large amounts of safe bank notes to push out bad bank notes

Established relationships among banks and forced them to redeem each other's notes at par

Who is generally hurt by protective tariffs and who is generally helped? Manufacturers are hurt and farmers are helped Governments are hurt and consumers are helped Exporters and consumers are hurt by tariffs and protected industries are helped Protected industries are hurt by tariffs and exporters and consumers are helped

Exporters and consumers are hurt by tariffs and protected industries are helped

Tallman and Moen (1990) provide narrative evidence of the Panic of 1907. They argue that what event led to the immediate breakout of the crisis in New York City? The San Francisco Earthquake of 1906 Failed corner on United Copper Company stock by F. Augustus Heinze The start of WWI The death of J.P. Morgan

Failed corner on United Copper Company stock by F. Augustus Heinze

The loosening of U.S. land policy quickly pushed the agricultural frontier west. What was main constraint on the speed of the western movement? The minimum cost of purchasing government land was rising throughout the 1800s Few Americans wanted to own a farm The government wanted to keep land in order to create national parks and land reserves Land had to be cleared and it took families a lot of time and effort to do so

Land had to be cleared and it took families a lot of time and effort to do so

______ is the economic term that people get more efficient doing something the more they do it? Specialization Street smarts Economies of scale Learning by doing

Learning by doing

The failure of the New York Safety Fund is often blamed on a principle-agent problem. Why did the Safety Fund fail from this issue while the Suffolk System was able to avoid it and survive? Losses in the Suffolk System were concentrated in a single bank which prompted them to supervise other bank's actions, whereas losses in the Safety Fund were dispersed amongst all banks which did not prompt them to supervise There were many fewer banks in the Suffolk System compared to the Safety Fund The Suffolk System was granted power from the state government to supervise banks while the New York Safety Fund was not given that power Banks in New England were relatively safer than banks in New York

Losses in the Suffolk System were concentrated in a single bank which prompted them to supervise other bank's actions, whereas losses in the Safety Fund were dispersed amongst all banks which did not prompt them to supervise

Which of the following items is in M2 but not in M1? Travelers checks Time deposits Demand deposits Government currency

Time deposits

What are the dates and times of the professor's normal office hours? Saturday 10:00pm - Midnight Tuesday 3:00-4:15pm and Friday 1:45-3:00pm Tuesday 1:30-2:30pm and Thursday 12:30-1:30pm Monday 3:00-4:15pm and Thursday 1:45-3:00pm

Tuesday 1:30-2:30pm and Thursday 12:30-1:30pm

What are the dates and times of the professor's normal office hours? -Saturday 10:00pm - Midnight -Monday 3:00-4:15pm and Thursday 1:45-3:00pm -Tuesday 3:00-4:15pm and Friday 1:45-3:00pm -Tuesday 1:30-2:30pm and Thursday 12:30-1:30pm

Tuesday 1:30-2:30pm and Thursday 12:30-1:30pm

Inventive activity (i.e., the creation of new inventions) is nearly always driven by what: a) An explicit research prize given by an organization or government b) A profit-seeking motive c) A large group of academics working together in a laboratory d) Government research labs

b) A profit-seeking motive

What is money? a) Anything issued by the government for payment of public debts b) Anything that is generally accepted for payments c) Anything that is backed by gold/silver d) Anything that is processed by a bank

b) Anything that is generally accepted for payments

Which of the following would decrease the deposit multiplier? a) People holding less money out of banks b) Banks holding more money as reserves c) The government decreasing the reserve requirement d) People begin trusting the banking system much more

b) Banks holding more money as reserves

If the GDP of the American colonies grew nearly 10-fold over the 1700s, but per capita growth was less than 35%, then what must have been occurring? -The nation was mostly agricultural and therefore output gains did not carry over -The King took most of the output for the empire -Population growth was strong over the period due to high fertility and immigration -Many people died in the colonies as a result of disease and harsh winters

Population growth was strong over the period due to high fertility and immigration

A entire production possibilities curve (and not just a point along the curve) illustrates what? -The likes and dislikes of the country's citizens -The country's government budget spending -The combinations of products a country can produce using all its resources -The size of a country's financial system

The combinations of products a country can produce using all its resources

Inventive activity (i.e., the creation of new inventions) is nearly always driven by what: An explicit research prize given by an organization or government A large group of academics working together in a laboratory Government research labs A profit-seeking motive

A profit-seeking motive

What was the main reason that the Fulton steam engine so revolutionary to river travel? -It could help clear rivers of snags and other debris -It was much quieter than previous engines and thus allowed dinner and dancing on ships -Allowed travel upstream without prohibitive costs -People liked the look of the engine and thus wanted to travel on the river

Allowed travel upstream without prohibitive costs

Eli Whitney's cotton gin solved a major bottleneck in the early production of cotton by? Allowing slaves to be used in cotton farming Allowing the quick and mechanized removal of seeds from raw cotton Allowing cotton plants to grow higher with more cotton Allowing workers a drink that would make them less tired and be able to work harder

Allowing the quick and mechanized removal of seeds from raw cotton

Which of the following best describes the U.S. Constitution? -Remarkably similar to the Articles of Confederation -A National System -A Federal System -Compromise between National and Federal Systems

Compromise between National and Federal Systems

What was the main purpose of the Patent Cooperation Treaty of 1970? Create a unified procedure for filing patents in more than one country Create the first U.S. Patent Office Allow patents in the U.S. for the first time Created the United Nations

Create a unified procedure for filing patents in more than one country

What was Hamilton's view on the early land debate? -He wanted land to be very expensive in order to encourage non-agricultural industries to develop -He wanted land to be sold very cheaply in order to encourage non-agricultural industries to develop -He wanted land to be very expensive in order to encourage democracy -He wanted land to be sold very cheaply in order to encourage democracy

He wanted land to be very expensive in order to encourage non-agricultural industries to develop

After the Revolutionary War, the British started to dump goods at very low prices on U.S. market. Why would this make sense? Hope to prevent any U.S. manufacturers from developing Had to get rid of old fashions and other items that were not in style Had to support their former colony in their newfound freedom Had too many goods in inventory and needed to get rid of them

Hope to prevent any U.S. manufacturers from developing

What are bank notes actually? IOUs of individual banks State issues of currency Counterfeit currency that tricked people into accepting Government currency with famous bank presidents on their front

IOUs of individual banks

Assuming the price of cars is lower in the rest of the world than in the U.S. and U.S. freely trades with other, which of the following would happen to the price, consumption, and production of cars in the U.S. economy if President Trump imposes a tariff on car imports from all other countries? -Nothing would occur in the U.S. -Increased price, decreased domestic production, decreased domestic consumption -Decreased price, decreased domestic production, increased domestic consumption -Increased price, increased domestic production, decreased domestic consumption

Increased price, increased domestic production, decreased domestic consumption

Banks help solve the maturity mediation problem. What describes this problem: Individuals do not have enough information to make good investments on their own Individuals do not have enough idle funds to provide the size of loans that most borrowers need. Individuals need a financial broker in order to purchase stocks and bonds Individuals need short-term access to deposits, but loans often need to be long-term

Individuals need short-term access to deposits, but loans often need to be long-term

Water power is fairly efficient and while it did not produce much power, its main drawback was what? Too many tourists want to look at and take pictures of the waterwheels It is noisy and workers much wear earplugs It is somewhat seasonal and could only be used in some locations Had to make sure coal was around

It is somewhat seasonal and could only be used in some locations

The U.S. did not allow banks to branch (i.e., operate in more than one location) before the 1980s. Why did the lack of branching lead to more historical bank failures and financial panics? People could not make up their minds on which bank to use and thus were more likely to pull their money out during a crisis Small banks operating in one city were much harder to supervise than large banks spanning multiple cities It prevented a central bank from being established in the U.S. until the 1980s It prevented banks from diversifying their loans across different areas

It prevented banks from diversifying their loans across different areas

The (re)discovery of New World was driven by countries trying to break whose initial monopoly over the spice trade? -Italian City-States -Spain -England -France

Italian City-States

How did the Panic of 1907 end? The New York Clearinghouse bailed out all trust companies even though they were not members J.P. Morgan deposited his and other wealthy individuals' money in trust companies and arranged to float bonds on European markets as needed FDR declared a bank holiday The Federal Reserve Act of 1913 was passed

J.P. Morgan deposited his and other wealthy individuals' money in trust companies and arranged to float bonds on European markets as needed

Which of the following events encouraged a large-scale but temporary increase in U.S. factory incorporations? Civil War of 1861-1865 Treaty of Paris of 1783 Jefferson Embargo of 1807-1809 and subsequent War of 1812 U.S. neutrality during Napoleonic War

Jefferson Embargo of 1807-1809 and subsequent War of 1812

Which of the following was the way that the Navigation Acts would have helped Britain? -Allow the American colonies to make a name for themselves in the world market -Helped the colonies find and mind gold and silver -Settle down the American colonists arguments over Britain's tight control -Kept shipping costs in the Empire and prevented other countries from undercutting

Kept shipping costs in the Empire and prevented other countries from undercutting

According to our growth accounting model, which of the following inputs contributed the largest share to U.S. GDP growth from 1840-1870? -Labor -Land -Productivity -Capital

Labor

Patenting is important for economic growth, but is subject to a "balancing act". As such, countries typically limit a patent to a fixed amount of time. Why is this the case? Patents provide broad legal protections and therefore the patent office must be careful to prevent "bad" people from receiving patents even if they successfully invented something The Patent Office must closely watch over the actions of inventors with patents to make sure that they do not profit off their invention Patents allow inventors to receive a return, but we need to make sure protection does not discourage future inventions Inventions must pass a balance test by which they are placed on a table to see if they fall over

Patents allow inventors to receive a return, but we need to make sure protection does not discourage future inventions

Clearinghouse provided some help to locations during financial panics. Which of the following best describes this approach? Gave out large checks to people based on a lottery system Cleared all bank notes and checks at full face value from throughout the U.S. Paid out government loans to individuals Provided emergency liquidity to members

Provided emergency liquidity to members

After Jackson vetoes the Second Bank of the United States what did he do with all the government's money? Put money back in the U.S. Treasury Created the Office of the Comptroller of the Currency to handle all the governments payments Put money in ordinary commercial banks around the country Invested in the stock market

Put money in ordinary commercial banks around the country

What Act most likely provided the necessary number of people to allow the Revolution to take place? -Quebec Act -Intolerable Acts -Sugar Act -Tea Act

Quebec Act

Why were the National Banks Acts of 1863 and 1864 actually passed? Wanted to create a new central bank in order to regulate the banking industry and provide emergency liquidity Distract the population from the Civil War Raise money for the Civil War by creating a demand for government bonds Free banking was considered a failure and Congress wanted to get rid of all traces of it

Raise money for the Civil War by creating a demand for government bonds

______ is defined as the difference at birth between the discounted lifetime earnings of a free laborer and the discounted lifetime slave net income? Specialization Rate of exploitation Rate of return on investment The gang system

Rate of exploitation

Before 1837, the U.S. financial system consisted mostly of banks that had to receive a special charter from their state legislature. Which of the following was a clear result of this approach? Strict rules and supervision on everyday bank activities A large number of banks entering and exiting in any given year Relatively slow growth in the number of banks An open system where anyone could start a bank

Relatively slow growth in the number of banks

While we do not have data between 1780 and 1840, we know that growth per capita after 1840 was faster than before 1780. This has led many scholars to point towards various causes of the accelerated growth. Which of the following authors argued that the so-called "take-off" was driven by the establishment of infrastructure (i.e., railroads)? -Jackson -David -Rostow -North

Rostow

Which of the regions of American colonies produced mostly for trade with Britain? -South -New England -Middle Atlantic -Canada

South

While the pound sterling was Britain's official currency, the U.S. chose to adopt a currency system more similar to what country? Spain Germany Italy France

Spain

The Beard Hacker Thesis argues two things. The first and often disputed argument is that production for the Civil War allowed Northern manufacturing to suddenly develop. What is the second and more lasting argument? That men with large beards are more likely to be engage in agriculture and thus the celebratory shaving of beards after the Civil War led to a shift towards manufacturing The destruction of the South during the Civil War allowed Northerners to seize the best southern farming land to create manufacturing plants The Civil War allowed the North to accelerate growth by passing legislation that unified markets and propelled industrialization (e.g., Homestead Act, Land-Grant College Act, and Transcontinental Railroad Acts) when the South could not object Southerners decided that manufacturing was the future and decided to completely stop growing cotton and other crops

The Civil War allowed the North to accelerate growth by passing legislation that unified markets and propelled industrialization (e.g., Homestead Act, Land-Grant College Act, and Transcontinental Railroad Acts) when the South could not object

What was the turning point of Britain's hands-off policy towards the colonies? -The Quebec Act of 1774 -The Declaration of Independence in 1776 -The End of the French and Indian War in 1763 -The Boston Massacre of 1770

The End of the French and Indian War in 1763

Why was the Pennsylvania Mainline Canal not as successful as the Eric Canal? -The Mainline Canal was built after railroads had already spread across the nation -The Mainline Canal did not reach all the way around the state and thus did not connect to the Midwestern producers -The Mainline Canal was built along the Appalachian Mountains forced portages/railroads in places where a formal canal was impossible -People preferred going through New York because of the prestige

The Mainline Canal was built along the Appalachian Mountains forced portages/railroads in places where a formal canal was impossible

In his Report on Manufactures, Hamilton argued that the government needed to support manufacturing. Which of the following was not one of the main reasons Hamilton gave? The U.S. needed a positive trade balance in order for it succeed relative to others Foreign governments were supporting their own manufacturers already Foreign manufactures had a head start and could out compete young manufacturers in the U.S. Foreign countries often protected their manufacturing through tariffs and restrictions on technology exports

The U.S. needed a positive trade balance in order for it succeed relative to others

Examining the location of patenting activity, Perlman (2016) argues that the size of a market increases the number of patents. She makes this claim based on seeing what pattern? No patents were created in the U.S. before the arrival of the transcontinental railroads in the 1860s The arrival of transportation improvements to an area (particularly railroads) greatly increased the number of patents produced High population areas did not have very much patenting activity compared to extremely rural areas Patents were only ever created around Ivy League schools

The arrival of transportation improvements to an area (particularly railroads) greatly increased the number of patents produced

Why did nearly all slaves in the U.S. work on cotton farms? The high price of cotton compensated plantation owners to bid away slaves from other crops Because government land prices were so expensive, there was a large number of free laborers available to work on Midwestern farms Slaves working on wheat and corn farms produced much less than free workers Northern farmers (where corn and wheat were corn) had more education and could work the land better

The high price of cotton compensated plantation owners to bid away slaves from other crops

Fogel and Engerman's Time on the Cross examines the data behind slavery and finds which of the following? Slavery was likely to have gone away on its own Slavery was not profitable for slave-owners and they preferred free workers The material conditions of life (i.e., height and diet) for slaves were similar to that of low income free whites Slaves were not more efficient than free workers

The material conditions of life (i.e., height and diet) for slaves were similar to that of low income free whites

When transportation costs fall in a world without international trade, we often say that the transportation "wedge" gets smaller and everyone wins. Why is this the case? -The price paid by the consumer falls and the price ultimately received after shipping costs by the producer remains the same -The price paid by the consumer rises and the price ultimately received after shipping costs by the producer remains the same -The price paid by the consumer falls and the price ultimately received after shipping costs by the producer rises -The price paid by the consumer rises and the price ultimately received after shipping costs by the producer falls

The price paid by the consumer falls and the price ultimately received after shipping costs by the produces rises

Why did the American colonies not fit typical mercantilist model? -They were far away from the main country (i.e., Britain) -They had good resources (i.e., gold/silver, spices, people) -They tended to be more religious -They did not have good resources (i.e., gold/silver, spices, people)

They did not have good resources (i.e. gold/silver, spices, people)

Even though they often believe that it was morally wrong to own slaves, why did so few northerners initially try to get rid of slavery? They eventually wanted slavery to spread into Northern agriculture to make it more efficient They thought if the nation ever had to go to war with another country they could draft slaves into the army They were extremely concerned over the protection of states' rights They greatly benefited from the cheap southern crops

They greatly benefited from the cheap southern crops

Total costs can be broken down into two pieces. __________ is the amount of money spent to produce each unit of a good, whereas __________ is the amount of money spent regardless of the amount produced. Raw goods costs, capital costs Variable costs, fixed costs Capital costs, raw good costs Fixed costs, variable costs

Variable costs, fixed costs

What is homesteading? -When people first build a structure on land they own -When land is given away to adults who agree to live on it for 5 years -When people are allowed to move onto land that they do not own -When land is held by the government for conservation efforts

When land is given away to adults who agree to live on it for 5 years

Steckel (1986) uses new data to document the causes of slave children mortality. The data indicate that which one of the following variables increased the death rates? Gender of the child (i.e., male children were different than female children) Work during late pregnancy (i.e., mothers that were just about to give birth during planting or harvest seasons were different from others) The education level of the mother (i.e., mothers who could not read or write were different from college-educated mothers) The place in Africa where the mothers come from (i.e., mothers from western Africa were different than mothers from eastern and central Africa)

Work during late pregnancy (i.e., mothers that were just about to give birth during planting or harvest seasons were different from others)

Which of the following is not one of the class' learning goals? Working to solve calculus equations Learning fundamental principles, generalizations, or theories Learning to apply course materials to improve rational thinking, problem solving, and decisions Gaining factual knowledge on the historical development of markets and institutions in the U.S.

Working to solve calculus equations

Which of the following is not an example of the "tragedy of the commons"? a) A CEO who destroys his company's machines by running them too long b) Air pollution by manufacturing plants c) Reduction of available water sources downstream because of excessive use of water by upstream individuals d) Cell phones going off in class

a) A CEO who destroys his company's machines by running them too long

Why would you not want to produce with a reaper if you had a small farm? a) A farmer would not be able to produce enough to sufficiently pay down the high fixed costs of buying a reaper b) A farmer would be done with their fields too quickly and have too much free time on their hands c) A farmer would have to work extra hours with the reaper in order to clear their field d) A farmer wanted to make sure their kids grew up working hard

a) A farmer would not be able to produce enough to sufficiently pay down the high fixed costs of buying a reaper

Which is the most likely example of a design patent? a) A patent on the shape of the new VolksWagen Beetle car design b) A patent on anew machine that produces soda cans for cheaper c) A patent on a new light-bulb that allows users to change the light color with their phone d) A patent on a new corn hybrid plant that is much more resistant to draught and disease

a) A patent on the shape of the new VolksWagen Beetle car design

What was the main reason that the Fulton steam engine was so revolutionary to river travel? a) Allowed travel upstream without prohibitive costs b) People liked the look of the engine and thus wanted to travel on the river c) It was much quieter than previous engines and thus allowed dinner and dancing on ships d) It could help clear rivers of snags and other debris

a) Allowed travel upstream without prohibitive costs

Which of the characteristics is not a key property of money in all places and periods? a) Backed by gold/silver b) Generally accepted for payment c) Does not lose value quickly d) Widely used to set a single menu of prices

a) Backed by gold/silver

The discount window at the Federal Reserve provides a place for _______? a) Banks to borrow from the Fed if they need short-term liquidity b) Banks to purchase or sell Treasury bonds c) Banks to print their own bank notes during panics d) Individuals to withdrawal cash from their Fed accounts without getting out of their car

a) Banks borrow from the Fed if they need short-term liquidity

Which of the following best describes the reason for the high failure rate of free banks relative to other banks? a) Collapse of state bond prices b) Wildcat banking c) Panics of 1837, 1839, and 1857 d) Lack of bank supervision

a) Collapse of state bond prices

Which of the following best describes the U.S. Constitution? a) Compromise between National and Federal Systems b) A National System c) A Federal System d) Remarkably similar to the Articles of Confederation

a) Compromise between National and Federal Systems

Fannie Mae and Freddie Mac were created by Congress to assist in the mortgage market. How did they encourage the housing bubble that emerged in the 2000s? a) Created a large number of mortgage backed securities b) Increased the standards associated with lending c) Created a large number of credit default swaps d) Took over bank supervision from the Fed

a) Created a large number of mortgage backed securities

How is economic development different from economic growth? a) Economic growth measures total output growth while economic development measures the growth of peoples' well-being b) Economic growth measures total output growth while economic development measures output growth per person c) Economic growth takes into account size differences between countries, while economic development does not d) Economic growth accounts for the quality of institutions, while economic development only measures production

a) Economic growth measures total output growth while economic development measures the growth of peoples' well-being

What is the reasoning for why modern governments focus on production and no longer consider mercantilism to be important? a) Free trade makes economies better off b) Countries can produce nearly every good that they would want due to increased technology c)Gold and silver are more readily available and thus every country has more than enough d)Countries grew tired of war and world-wide peace has emerged

a) Free trade makes economies better off

In his first year, FDR restricted gold exports, banned the private holding of gold, and raised the price of gold in the U.S. What was he seeking to do? a) He wanted to prevent the money supply and prices from falling further b) He owned gold mines and wanted to drive up gold prices c) He wanted to fund all his New Deal programs d) He wanted to prevent Hitler from controlling the world's gold supply

a) He wanted to prevent the money supply and prices from falling further

Ford's strategy on having the lowest priced car was successful in the market, but what was his strategy's distinct problem? a) His focus on the assembly line and economies of scale prevented him from innovating on the car itself or quickly implementing new technology b) His $5 a day plan raised wages by so much that he could not produce the lowest priced car c) He did not vertically integrate his factory because he produced too many types of cars d) He was constantly changing the color and design of the car and could not improve the production

a) His focus on the assembly line and economies of scale prevented him from innovating on the car itself or quickly implementing new technology

After the Revolutionary War, the British started to dump goods at very low prices on U.S. market. Why would this make sense? a) Hope to prevent any U.S. manufacturers from developing b) Had too many goods in inventory and needed to get rid of them c) Had to get rid of old fashions and other items that were not in style d) Had to support their former colony in their newfound freedom

a) Hope to prevent any U.S. manufacturers from developing

According to the Von Thünen's Featureless Plain Model, what do we expect to occur to commercial agriculture when a railroad is built out from the city center in one direction? a) In addition to the initial circle of commercial agriculture, commercial agriculture would occur in a cone-like shape starting at the city center and getting smaller on each side of the railroad as the distance along the railroad increased b) In addition to the initial circle of commercial agriculture, commercial agriculture would increase in a box-like shape starting at the city center and going along either side of the railroad for as long as the railroad reaches c) The circle of commercial agriculture around the city center would expand in all directions d) Commercial agriculture would not change

a) In addition to the initial circle of commercial agriculture, commercial agriculture would occur in a cone-like shape starting at the city center and getting smaller on each side of the railroad as the distance along the railroad increased

The formation of a trust (such as those in the oil industry) is an attempt to do what? a) Incentivize competing companies to collude and act like a monopoly by sharing profits b) Pass down wealth to people's children when they die c) Eliminate all other companies in order to give a single company full control of the market d) Make a public show of strength to let everyone know who was in charge of the industry

a) Incentivize competing companies to collude and act like a monopoly by sharing profits

While companies can secretly collude, set a high price, and earn high profits, most collusion does not last for very long. Why is this the case? a) Individual firms have a large incentive to undercut the high collusive price and capture the entire market regardless of the deal they made b) Most businessmen would not do anything morally ambiguous for high returns c) Competitors typically do not ever talk to each other in order to make such a deal d) Customers are good at immediately finding out about collusion and boycotting products

a) Individual firms have a large incentive to undercut the high collusive price and capture the entire market regardless of the deal they made

Which of the following was a drawback of government land grants to fund railroads? a) It did not prevent railroads from building wherever they wanted just to obtain extra land b) It did not encouraged railroads to bring out people to settle the west c) It had large direct costs for the government d) It gave away good land that would have been quickly taken by homesteaders

a) It did not prevent railroads from building wherever they wanted just to obtain extra land

What is the drawback of buying stock on margin? a) It magnifies the losses of downturns in stock prices b) It magnifies the gains of increased in stock prices c) If the stock does poorly, investors have to pay a lower interest rate back to the lender d) If the stock does well, investors have to pay a higher interest rate back to the lender

a) It magnifies the losses of downturns in stock prices

The U.S. did not allow banks to branch (i.e., operate in more than one location) before the 1980s. Why did the lack of branching lead to more historical bank failures and financial panics? a) It prevented banks from diversifying their loans across different areas b) Small banks operating in one city were harder to supervise than large banks spanning multiple cities c) It prevented a central bank from being established in the U.S. until the 1980s d) People could not make up their minds on which bank to use and thus were more likely to pull their money out during a crisis

a) It prevented banks from diversifying their loans across different areas

Why might people want a Bimetallic Standard (as opposed to afiat currency)? a) Prevents a government from manipulating its currency b) Allows a government to increase the money supply to help the economy during financial panics c) Encourages inflation that makes borrowers much better off d) Encourages people to seek out gold and silver mines to enrich the country

a) Prevents a government from manipulating its currency

Why did the financial innovations of the 1990s and 2000s help lead to the Great Recession? a) Spread housing market risk across the entire financial network b) Decreased the amount of leverage and debt in the economy c) Greatly increased the amount of liquidity that banks were holding d) They increased economic inequality

a) Spread housing market risk across the entire financial network

Before the arrival of Ford's Model T in 1908, the automobile industry could best be described as being in what step of the industry life cycle? a) Startup b) Growth c) Shakeout d) Maturity

a) Startup

When the attempt by plantation owners after the Civil War to hire former slaves and work them the same long hours failed, they established the Tenant System by ______? a) Subdividing their land and renting the pieces to other farmers b) Selling off their land to the newly freed slaves c) Having more children in order to have enough cheap labor to work the land d) Abandoning their land and renting a place in the nearest city

a) Subdividing their land and renting the pieces to other farmers

To encourage greater productivity, some manufacturing firms implemented _______ whereby workers received a much higher wage rate if their output met or exceeded the daily standard. a) The differential piece-rate method b) The shop-order system c) The gang system of labor d) Overtime pay

a) The differential piece-rate method

What was the turning point of Britain's hands-off policy towards the colonies? a) The End of the French and Indian War in 1763 b) The Boston Massacre of 1770 c) The Quebec Act of 1774 d) The Declaration of Independence in 1776

a) The end of the French and Indian War in 1763

Following the construction of a high speed train system that substantially reduces transportation costs within the U.S., what would we expect to occur to prices paid by U.S. consumers and prices received by U.S. producers after shipping costs if the U.S. does not engage in international trade? a) The price paid by the consumer falls and the price ultimately received after shipping costs by the producer rises b) The price paid by the consumer falls and the price ultimately received after shipping costs by the producer remains the same c) The price paid by the consumer rises and the price ultimately received after shipping costs by the producer remains the same d) The price paid by the consumer rises and the price ultimately received after shipping costs by the producer falls

a) The price paid by the consumer falls and the price ultimately received after shipping costs by the producer rises

What is the difference between vertical integration and horizontal integration? a) Vertical integration is when companies own their supply chain, and horizontal integration is when companies begin to produce related goods/services b) Horizontal integration is when companies buy out competitors of roughly the same size, whereas vertical integration is when companies buy out competitors of much larger sizes c) Horizontal integration is when companies own their supply chain, and vertical integration is when companies begin to produce related goods/services d) Vertical integration is when companies buy out competitors of roughly the same size, whereas horizontal integration is when companies buy out competitors of much larger sizes

a) Vertical integration is when companies own their supply chain, and horizontal integration is when companies begin to produce related goods/services

Standard Oil fortified their management by shifting from a trust structure to a holding company structure. What was the reason for this switch? a) Wanted to create a single unified chain of command with punishment for managers for deviations from the agreed upon strategy b) Congress passed the Clayton Anti trust in 1914 c) Rockefeller wanted to ruthlessly cut all his partners out of the business and obtain all the power and money for himself d) Standard Oil needed a way to show off to stockholders even if it did not help the company

a) Wanted to create a single unified chain of command with punishment for managers for deviations from the agreed upon strategy

When trying to calculate the total benefits of the railroad to the nation, we have to account for two types of externalities. Specifically, _______ consists of benefits to producers of products that railroads purchased in order to operate, whereas ______ consists of benefits to all producers because of the railroad's ability to allow larger markets to develop and goods to arrive faster. a) backwards linkages; forward linkages b) forward linkages; backwards linkages c)vertical integration; horizontal integration d) horizontal integration; vertical integration

a) backwards linkages; forward linkages

According to our growth accounting model, which of the following inputs contributed the largest share to U.S. GDP growth from 1840-1870? a) Labor b) Land c) Capital d) Productivity

a) labor

The Quantity Theory of Money would argue that which of the following is generally responsible for increases in prices (i.e., inflation)? a) Money going up b) Output going up c) Velocity going down d) Money going down

a)money going up

What is the "originate to distribute" model? a) Banks sell high-return bonds in order to help firms purchase other firms b) Banks receive fees for issuing loans and then sell the loan to others regardless of risk c) Banks sell off credit default swaps for very cheap and a high profit d) Banks provide toasters in order to gain more depositors

b) Banks receive fees for issuing loans and then sell the loan to others regardless of risk

We argued that American technology was not necessarily superior to the British, and that the British were unlikely to switch to American technology and the Americans were unlikely to switch to British technology. Why was this the case? a) American technology was labor-heavy because U.S. wages were relatively low, and British technology was capital-heavy because the British rental rate of capital was relatively low b) British technology was labor-heavy because British wages were relatively low, and American technology was capital-heavy because the U.S. rental rate of capital was relatively low c) America and Great Britain wanted to produce different types of goods d) America and Great Britain had very high barriers to technology flow and no technology could be exchanged

b) British technology was labor-heavy because British wages were relatively low, and American technology was capital-heavy because the U.S. rental rate of capital was relatively low

The Great Depression consisted of two distinct economic downturns. The second downturn during 1937-38 was driven by _____? a) FDR's sudden death in office b) Congress reducing expenditures and the Fed raising reserve requirements thinking the crisis was over c) The outbreak of European fighting in WWII d) People withdrawing money from their bank accounts to purchase the newly released TV

b) Congress reducint expenditures and the Fed raising reserve requirements thinking the cirsis was over

Why was cotton not among the crops initially grown in the American colonies? a)The price of cotton was too cheap to produce profitably b) Existing cotton seeds did not grow particularly well in the Americas, growing low to ground with seeds that were hard to clean c) Cotton was already produced in large quantities in Great Britain d) Colonists preferred wool products because cotton was too itchy

b) Existing cotton seeds did not grow particularly well in the Americas, growing low to ground with seed that were hard to clean

As time went on, land size for homesteading was steadily increased. Why might this have been necessary in order to encourage settlement in the west? a) Railroads were buying up as much land as they could in order to lay track b) Farmers needed more because western lands had less water, a harsher climate, and rockier soil c) The U.S. government wanted to compete with Canada for land rights in the west d) People decided they wanted to be ranchers insteadof farmers

b) Farmers needed more because western lands had less water, a harsher climate, and rockier soil

Why is more growth not always better? a) Growth leads to economic inequality which makes some people worse off b) Growth can sometimes leads to externalities that hurt individuals that were not party to the growth c) Growth leads to more conflict with other countries d) Growth leads to economic development

b) Growth can sometimes leads to externalities that hurt individuals that were not party to the growth

Charles Goodyear discovered the technique to vulcanize rubber, but was not able to earn a high profit-level from his invention because _______? a) The U.S. government prevented Goodyear from using his patent because of its applicability to national defense b)He spent a lot of time and money trying to defend his patent both domestically and internationally but had relatively limited success at doing so c) He was never able to receive a single patent d) The demand for rubber products was low and thus was not profitable

b) He spent a lot of time and money trying to defend his patent both domestically and internationally but had relatively limited success at doing so

What was Jefferson's view on the early land debate? a) He wanted land to be sold very cheaply in order to encourage non-agricultural industries to develop b) He wanted land to be sold very cheaply in order to encourage democracy c) He wanted land to be very expensive in order to encourage non-agricultural industries to develop d) He wanted land to be very expensive in order to encourage democracy

b) He wanted land to be sold very cheaply in order to encourage democracy

What are bank notes actually? a) Government currency with famous bank presidents on their front b) IOUs of individual banks c) State issues of currency d) Counterfeit currency

b) IOUs of individual banks

During most of the Great Depression, the Fed took a passive role and even discouraged banks from borrowing at the discount window because ______? a) It did not want to sway the Presidential Election of 1932 b) It failed to appreciate the magnitude of the panic and looked at the wrong indicators c) It thought Congress was solely responsible for the security of the financial system d) It had no way to help banks that needed funds or to increase the money supply

b) It failed to appreciate the magnitude of the panic and looked at the wrong indicators

How did the Panic of 1907 end? a) FDR declared a bank holiday b) J.P. Morgan deposited his and other wealthy individuals' money in trust companies and arranged to float bonds on European markets as needed c) The Federal Reserve Act of 1913 was passed d) The New York Clearinghouse bailed out all trust companies even though they were not members

b) J.P. Morgan deposited his and other wealthy individuals' money in trust companies and arranged to float bonds on European markets as needed

The New York Safety Fund was intended to do what? a) Eliminate bank note discounts in the northeast b) Limit losses to depositors and noteholders c) Bailout banks when they failed and allow them to continue to operate d) Help the New York financial system after the Second Bank of the United States' charter was not renewed

b) Limit losses to depositors and noteholders

______ is defined as the difference at birth between the discounted lifetime earnings of a free laborer and the discounted lifetime slave net income? a) Rate of return on investment b) Rate of exploitation c) The gang system d) Specialization

b)Rate of exploitation

The failure of the New York Safety Fund is often blamed on a principle-agent problem. Why did the Safety Fund fail from this issue while the Suffolk System was able to avoid it and survive? a) There were many fewer banks in the Suffolk System compared to the Safety Fund b) Losses in the Suffolk System were concentrated in a single bank which prompted them to supervise other bank's actions, whereas losses in the Safety Fund were dispersed amongst all banks which did not prompt them to supervise c) The Suffolk System was granted power from the state government to supervise banks while the New York Safety Fund was not given that power d) Banks in New England were relatively safer than banks in New York

b) Losses in the Suffolk System were concentrated in a single bank which prompted them to supervise other bank's actions, whereas losses in the Safety Fund were dispersed amongst all banks which did not prompt them to supervise

Why was the transportation revolution vital for the growth of modern manufacturing? a) Farmers would not allow any machines to be built in the Midwest and West and thus transportation was needed to take Northeastern goods to the rest of the country b) Machines are only useful if firms can sell a lot (i.e., have a big market) c) Most manufactured goods have to arrive at their destinations very quickly or else they spoil d) Transportation improvements increased the number of eastern manufacturing workers by allowing failed western farmers to easily move back east

b) Machines are only useful if firms can sell a lot (i.e., have a big market)

One of the main ways that manufacturers (including Ford Motor Co.) were increasing the speed of their production after 1900 was to redesign their factories by _____? a) Hiring very skilled workers instead of installing new machines b) Making them based on the order of the steps of production rather than on the power source c) Installing better break rooms to allow workers proper downtime d) Improving worker safety

b) Making them based on the order of the steps of production rather than on the power source

Which of the following outcomes are not directly associated with the mercantilism approach? a) Creating colonies around the world b) Push for increased international trade without tariffs c) Wars over land and resources d) Equating gold and silver with power

b) Push for increased international trade without tariffs

How did the U.S.government solve the specific land policy issue of "graduation"? a) Giving away land to all high school graduates b) Selling off unsold land for very cheap c) Giving away land to anyone who would agree to work and live on it for 5 years d) Designating land for national parks and conservation efforts

b) Selling off unsold land for very cheap

The industry life cycle describes the birth, rise, and decline of industries over time. During which of the steps is the number of competitors declining (i.e., consolidation) and a separation of the market into segments based on price or quality? a) Growth b) Shakeout c) Maturity d) Relative Decline

b) Shakeout

While the pound sterling was Britain's official currency, the U.S. chose to adopt a currency system more similar to what country? a) France b) Spain c) Germany d) Italy

b) Spain

The ______ was designed to raise revenue and achieve mercantilist goals, while the ______ was simply intended to raise revenue. a) Sugar Act; Tea Act b) Sugar Act; Stamp Act c) Tea Act; Quebec Act d) Stamp Act; Quebec Act

b) Sugar Act; Stamp Act

Between 1850 and 1858, there was a sudden increase in reaper sales. What was the main reason for the rise in reapers during the decade? a) The apple pie was invented and farmers wanted more free time to enjoy the treat b) The price of wheat in the U.S. rose dramatically due to the Crimean War in Europe thus increasing the number of acres that most farmers wanted to plant c) The Civil War drew away farm workers and thus increased the need for the reaper d) Slavery became legal in the Midwest and Great Plains and thus increased the need for the reaper

b) The price of wheat in the U.S. rose dramatically due to the Crimean War in Europe thus increasing the number of acres that most farmers wanted to plant

Why did people use bank notes in a large number of transactions before the Civil War? a) Bank notes were required to be paid in hard currency when presented at any bank in the country b) There was relatively little gold and silver coins available in circulation c) Bank notes were backed by assets and thus were very safe d) There was always a central bank that was willing to exchange the notes at full value

b) There was relatively little gold and silver coins available in circulaion

Why did the American colonies not fit the typical mercantilist model? a) They were far away from the main country (i.e., Britain) b) They did not have good resources (i.e., gold/silver, spices, people) c) They tended to be more religious d) They had good resources (i.e., gold/silver, spices, people)

b) They did not have good resources (i.e., gold/silver, spices, people)

Even though they often believedthat it was morally wrong to own slaves, why did so few Northerners initially try to get rid of slavery? a) They were extremely concerned over the protection of states' rights b) They greatly benefited from the cheap southern crops c) They eventually wanted slavery to spread into Northern agriculture to make it more efficient d) They thought if the nation ever had to go to war with another country they could draft slaves into the army

b) They greatly benefited from the cheap southern crops

The Infant Industry Argument states which of the following? a) Newborns are a precious resource in nations that lack large populations and therefore the government needs to invest in public health to increase the number of babies that survive to adulthood b) Young firms are initially inefficient and thus temporary tariffs are sometimes necessary to protect them until they become efficient c) Young firms often have inexperienced management and thus the government should encourage training by establishing land grant universities d) Young firms often fail and must be protected from bankruptcy using government bailout funds

b) Young firms are initially inefficient and thus temporary tariffs are sometimes necessary to protect them until they become efficient

In addition to not having gold/silver mines, what is the main reason the American colonies had relatively little hard currency (i.e., gold and silver coins)in circulation? a) The colonies did not have need of hard money because of the institution of Communism b) The colonies operated a large trade deficit with other countries c) The colonies issued paper currency because people thought it was worth more than coins d) The King demanded that all the gold and silver coins be immediately shipped to the mainland

b) the colonies operated a large trade deficit with other countries

Why did Gallatin argue that the federal government was needed rather than local companies or state governments? a) The government needed to provide a social safety net for individuals b) Some of the most important works would become productive only when all connecting improvements were complete and individual companies/states would not be able to do them all c) The government had excess funds that it needed to get rid of d) It was the only way the government might be able to sell off land

b)Some of the most important works would become productive only when all connecting improvements were complete and individual companies/states would not be able to do them all

In his Report on a National Bank, Hamilton made several claims in support of establishing a Bank. Which of the following is not among the principal advantages he highlights? a) A national bank would augment the active productive capital of the country b) A national bank would help grow the stock of money without needing international trade c) A national bank would establish more commercial banks and avoid political favoritism d) A national bank would assist the government in making and collecting payments

c) A national bank would establish more commercial banks and avoid political favoritism

After the Panic of 1907, Congress' immediate but temporary solution for the nation's inelastic currency was_________? a) Printing government money on more flexible paper that would not wear out as quickly b) Creating the discount window under the Federal Reserve Act c) Allowing banks to monetize their assets (i.e., print bank notes) during panics under the Aldrich Vreeland Act d) Allowing banks to branch across state lines

c) Allowing banks to monetize their assets (i.e., print bank notes) during panics under Aldrich Vreeland Act

How do commercial banks multiply the amount of currency in an economy to become M1? a) Banks issue credit cards which are part of M1 b) Banks help coin money and print federal currency which are part of M1 c) Banks use deposits to provide loans which in turn puts money back out into circulation to create more deposits which are part of M1 d) Banks help people manage their money and invest in bonds and stockswhich are part of M1

c) Banks use deposits to provide loans which in turn puts money back out into circulation to create more deposits which are part of M1

Which of the following was not a way that GM competed with Ford for business? a) Developed a market segment approach where every brand met a different price group b) Focused on style as well as price by generating more types of cars and changing them each year c) Built a single factory that produced all the company's car brands at once d) Coordinated across all of its companies to standardize parts and lower costs

c) Built a single factory that produced all the company's car brands at once

What was the main purpose of the Patent Cooperation Treaty of 1970? a) Create the first U.S. Patent Office b) Allow patents in the U.S. for the first time c) Create a unified procedure for filing patents in more than one country d) Create the United Nations

c) Create a unified procedure for filing patents in more than one country

The concept of ________ argued that many farmers were trapped into debt because they had to take out high interest rate loans from dishonest lenders and often could not repay. a) Tenant system b) The gang system c) Debt peonage d) The savings and loan crisis

c) Debt peonage

What is the difference between specialization and economies of scale? a) Economies of scale discusses the range of different products you produce and specialization measures the amount that you physically produce b) Economies of scale measures the speed at which you make things and specialization discusses the quality of your outputs c) Economies of scale measures the amount that you physically produce and specialization discusses the range of different products you produce d) Economies of scale discusses the quality of your outputs and specialization measures the speed at which you make things

c) Economies of scale measures the amount that you physically produce and specialization discusses the range of different products you produce

In the absence of federal banking regulation, the Suffolk Banking System was a private entity that stepped in to facilitate the useof bank notes. How did they achieve this? a) Issued large amounts of safe bank notes to push out bad bank notes b) Purchased stock of other banks in order to control their actions c) Established relationships among banks and forced them to redeem each other's notes at par d) Were given power by state legislatures to punish banks whose notes traded below their par value

c) Established relationships among banks and forced them to redeem each other's notes at par

Which of the following inputs became the most important for agricultural output during the 1900s? a) Land b) Labor c) Fertilizer d) Capital

c) Fertilizer

Which of the following was not a key emphasis of the "American System"? a) Simplicity of design b) Large scale output c) Focus on highly skilled labor d) Standardization

c) Focus on highly skilled labor

Even though he significantly increased government spending during the Great Depression, Herbert Hoover has a bad reputation next to FDR primarily because _______? a) He was not willing to go on the radio to calm the nation b) He believed that the Depression would help get him re-elected and did not want to fix it quickly c) He did not establish federal work relief (i.e., government paying people to work) d) He was a Republican

c) He did not establish federal work relief (i.e., government paying people to work)

How does the arrival or improvement of transportation affect competition in general? a) Leaves competition the same because firms only want to serve their original customers regardless of the potential to sell to customers in new areas b) Decreases competition because firms can offer a cheaper price to local customers and thus the entry of new firms is discouraged c) Increases competition because multiple firms can serve the same market despite being located other places

c) Increases competition because multiple firms can serve the same market despite being located other places

The Sherman Antitrust Act of 1890 was the first law that allowed for the breaking up of companies that had monopoly power and for the punishment trusts that were colluding. However, it did not initially see much success because _____? a) Trusts were too secretive and no one (not even the government) knew that they were operating b) Common people were benefiting so much from high prices due to the trusts that they begged their politicians not to prosecute the companies c) It did not lay out clear legal definitions for the concepts of "trust" and "monopoly" d) The Supreme Court ruled the law was unconstitutional

c) It did not lay out clear legal definitions for the concepts of "trust" and "monopoly"

___________ describes a bond that is made up of a large number of mortgage loans? a) Subprime mortgages b) Credit default swaps c) Mortgage-backed securities d) Repurchase agreements

c) Mortgage-backed securities

What is the key difference between markets with perfect competition and those with imperfect competition? a) Perfect competition allows firms to act like monopolists and set an extremely high price whereas imperfect competition forces firms to compete with other companies b) Imperfect competition has many more firms competing for customers than perfect competition c) Products in perfect competition cannot be differentiated from each other (i.e., virtually identical products), whereas those in imperfect competition can be differentiated (i.e., different brand names or quality) d) Products in imperfect competition cannot be differentiated from each other (i.e., virtually identical products), whereas those in perfect competition can be differentiated (i.e., different brand names or quality)

c) Products in perfect competition cannot be differentiated from each other (i.e., virtually identical products), whereas those in imperfect competition can be differentiated (i.e., different brand names or quality)

After Jackson vetoed the Second Bank of the United States,what did he do with all the government's money? a) Invested in the stock market b) Created the Office of the Comptroller of the Currency to handle all the governments payments c) Put the money in ordinary commercial banks around the country d) Put the money back in the U.S. Treasury

c) Put the money in ordinary commercial banks around the country

What industry was the first to develop modern business management structures and why? a) Textile factories because they were the first to develop labor-saving devices b) Retail firms because they were the first to market items through the mail c) Railroads because they needed modern management techniques to operate in a variety of locations and provide a variety of services d) Computer companies because they had to create new technology and market it to the world

c) Railroads because they needed modern management techniques to operate in a variety of locations and provide a variety of services

Railroads reduced travel time compared to canals. While the higher speed of trains compared to boats is one factor, which drove this travel time reduction in a targeted and endogenous way? a) Railroads were built by state governments and thus were much more efficient b) Railroads were cheaper and thus people did not care if they were slower c) Railroads could be built straight to specific large cities whereas canals took roundabout routes based on where rivers were located d) People on railroads could bribe the conductor to speed up the train if they needed

c) Railroads could be built straight to specific large cities whereas canals took roundabout routes based on where rivers were located

Why do investors use credit default swaps? a) Increase the return of investing in mortgage backed securities when prices were rising b) Obtain liquidity c) Reduce the risk of investing in mortgage backed securities d) Prevent a run on banks

c) Reduce the risk of investing in mortgage backed securities

As opposed to the Glass-Steagall Act of 1935, the Glass-Steagall Act of 1933 _____? a) Had the government buy excess crops and pay farmers not to grow them b) Had the government hire many workers to build roads and other infrastructure projects c) Separated depository banks from investment banks and installed deposit insurance d) Created the Board of Governors that had absolute power over the various Fed districts

c) Separated depository banks from investment banks and installed deposit insurance

Which of the following banking issues did the Federal Reserve Act not solve at all? a)Inelastic currency b)Lender of last resort c) State banks and their low regulations d)Pyramid of reserves

c) State banks and their low regulations

3. Which of the following would not be directly counted towards an accurate and full calculation of U.S. GDP? a) Illegal drug sales in the U.S. b) Sugar sales in the U.S. c) Steel sold in the U.S. to eventually be used in the construction of houses d) New car sales in the U.S.

c) Steel sold in the U.S. to eventually be used in the construction of houses

In his Report on Manufactures, Hamilton argued that the government needed to support manufacturing. Which of the following was no tone of the main reasons that Hamilton gave? a) Foreign governments were supporting their own manufacturers already b) Foreign manufactures had a head start and could out compete young manufacturers in the U.S. c) The U.S. needed a positive trade balance in order for it succeed relative to others d) Foreign countries often protected their manufacturing through tariffs and restrictions on technology exports

c) The U.S. needed a positive trade balance in order for it succeeded relative to others

Which of the following was a main reason that both Jefferson and Hamilton wanted a rectangular land registration system (i.e., the Northeastern Township Approach)? a) Both were from the Northeast where the system was already in use b) The system brings in more revenue because people naturally like rectangles instead of other shapes c) The system's precise boundaries prevented land disputes d) Fee simple could only be utilized on such a system

c) The system's precise boundaries prevented land disputes

The Gallatin Plan of 1808 called for the government to do what? a) Pass antitrust legislation in order to discourage the collusion of large transportation companies b) Purchase turnpikes and canals from private companies that were overcharging customers c) Undertake a system of land and water transportation improvements d) Research new canal and railroad technology in order to boost private companies' production

c) Undertake a system of land and water transportation improvements

Which of the following Supreme Court cases reduced the power of states to regulate interstate commerce that extended across state-lines and still restricts state-power today? a) Munn v. Illinois b) M. Penny bags v. Illinois c) Wabash, St. Louis, and Pacific Railroad v. Illinois d) Short-Line Railroad v. New York

c) Wabash, St. Louis, and Pacific Railroad v. Illinois

Which of the following is not one of the class' learning goals? a) Gaining factual knowledge on the historical development of markets and institutions in the U.S. b) Learning fundamental principles, generalizations, or theories c) Working to solve calculus equations d) Learning to apply course materials to improve rational thinking, problem solving, and decisions

c) Working to solve calculus equations

An entire production possibilities curve (and not just a point along the curve) illustrates what? a) The likes and dislikes of the country's citizens b) The country's government budget spending c) The geographic size of a country d) The combinations of products a country can produce using all its resources

d) the combinations of products a country can produce using all its resources

Which one of the following is true in the Von Thünen's Featureless Plain Model before a railroad, canal, or road is built? a) On a featureless plain, all farmers will engage in commercial activity because they can easily walk everywhere b) On a featureless plain, no farmers will produce for commercial sale because they cannot reach the city center before their goods spoil and instead they will all produce only for their own family's consumption (i.e., subsistence farming) c) On a featureless plain, only those farmers that live within a certain distance from the city center will engage in commercial agriculture whereas the rest of farmers will produce only for their own family's consumption (i.e., subsistence farming) d) On a featureless plain, there is nothing interesting to do so most people will take up basket weaving to pass the time

c) on a featureless plain, only those farmers that live within a certain distance from the city center will engage in commercial agriculture whereas the rest of the farmers will produce only for their own family's consumption (i.e., subsistence farming)

Why did nearly all slaves in the U.S. work on cotton farms? a) Slaves working on wheat and corn farms produced much less than free workers b) Northern farmers (where corn and wheat were grown) had more education and could work the land better than slaves c) The high price of cotton compensated plantation owners to bid away slaves from other crops d) Because government land prices were so expensive, there was a large number of free laborers available to work on Midwestern farms

c) the high price of cotton compensated plantation owners to bid away slaves from other crops

The Manufacturing Belt is what? a) The transcontinental railroad that ran across the middle of the country allowing manufactured goods to be traded throughout the nation b) An area of the country (i.e., mostly in the Southeast) where nearly all of the nation's belts and leather goods were produced for over a century c) An area of the country (i.e., mostly in the Midwest) where nearly all of the nation's manufacturing goods were produced for over a century d) The safety belts that manufacturing workers were required to wear when working with machinery

c)An area of the country (i.e., mostly in the Midwest) where nearly all of the nation's manufacturing goods were produced for over a century

Banks help solve the denomination mediation problem. What describes this problem: a) Individuals need short-term access to deposits, but loans often need to be long-term b) Individuals need a financial broker in order to purchase stocks and bonds c) Individuals provide small amounts of deposits, but loans often need to be very large d) Individuals do not have enough information to make good investments on their own

c)Individuals provide small amounts of deposits, but loans often need to be very large

The two likely causes of the depth of the Great Depression are _____which highlights the decline of the money supply due to money held outside the banking system and ______ which highlights how hard it was for firms to receive loans because bank failures destroyed borrowing relationships. a) Forward Linkages; Backwards Linkages b) Backwards Linkages; Forward Linkages c) Monetary Effects; Non-Monetary Effects d) Non-Monetary Effects; Monetary Effects

c)Monetary Effects; Non-Monetary Effects

Stock prices nearly tripled during the late 1920s. Many of the stocks were bought on margin. What does buying stock on margin involve? a) Buying stock outside of main stock exchanges b) Buying enough stock to control its price c) Buying discounted stock that no one wants d) Borrowing money to purchase stock

d)Borrowing money to purchase stock

Assuming the price of steel is lower in the rest of the world than in the U.S. and U.S. freely trades with other counties, which of the following would happen to consumer and producer surplus of steel in the U.S.if President Trump imposes a tariff on steel imports from all others countries? a) Increased consumer surplus, decreased producer surplus b) Increased consumer surplus, increased producer surplus c) Decreased consumer surplus, decreased producer surplus d) Decreased consumer surplus, increased producer surplus

d) Decreased consumer surplus, Increased producer surplus

_______ is the idea that it is hard to have transactions without money because each party has to demand what the other has? a) Medium of exchange b) Fiat currency c) Legal tender d) Double coincidence of wants

d) Double coincidence of wants

Which of the following canals was so successful that it spawned a wave of canal building? a) Pennsylvania Mainline b) Baltimore and Ohio Canal c) Massachusetts Canal d) Erie Canal

d) Erie Canal

How did Jay Gould spur the massive railroad consolidation movement after the Civil War? a) Challenging Vanderbilt to a duel which gave him control of Vanderbilt's railroad system b) Acting with such absolute integrity that others idolized him and tried to replicate his approach c) Inventing a new railroad locomotive that could travel across different sized tracks d) His wild actions proved to Vanderbilt and others that collusion was not possible in the long run because people were always going to undercut prices and try to take over the system

d) His wild actions proved to Vanderbilt and others that collusion was not possible in the long run because people were always going to undercut prices and try to take over the system

Water power is fairly efficient and while it did not produce much power, its main drawback was what? a) It is noisy and workers much wear earplugs b) Too many tourists want to look at and take pictures of the waterwheels c) Had to make sure coal was around d) It is seasonal and could only be used in some locations

d) It is seasonal and could only be used in some locations

In which of the following ways did the Navigation Acts help Britain? a) Allowed the American colonies to make a name for themselves in the world market b) Settled down the American colonists'arguments over Britain's tight control c) Helped the colonies find and mine gold and silver d) Kept shipping costs in the Empire and prevent other countries from undercutting

d) Kept shipping costs in the empire and prevent other countries from undercutting

The loosening of U.S. land policy quickly pushed the agricultural frontier west. What was the main constraint on the speed of the western movement? a) The minimum cost of purchasing government land was rising throughout the 1800s b) Few Americans wanted to own a farm c) The government wanted to keep land in order to create national parks and land reserves d) Land had to be cleared and it took families a lot of time and effort to do so

d) Land had to be cleared and it took families a lot of time and effort to do so

_____is the economic term that people get more efficient doing something the more they do it? a) Street smarts b) Economies of scope c) Economies of scale d) Learning by doing

d) Learning by doing

U.S. Neutrality during the Napoleonic War led to a large increase in U.S. exports. Nearly all of the increase was due to what? a) A sudden and large development of American manufacturing factories b) The U.S. discovery of gold in California c) The U.S. exported anti-British propaganda in order to support their French brethren d) Many countries sent goods to the U.S. in order to be reexported to the warring countries

d) Many countries sent goods to the U.S. in order to be reexported to the warring countries

Why would an investment bank or hedge fund primarily use repurchase agreements (i.e., repos)? a) It allowed them to gain more information on firms that they worked with b) Wanted to invest in gold during the crisis c) Obtain liquidity but did not want to hold onto the assets d) Obtain liquidity but hold onto the assets

d) Obtain liquidity but hold onto the assets

Patenting is important for economic growth, but is subject to a "balancing act". As such, countries typically limit a patent to a fixed amount of time. Why is this the case? a) Patents provide broad legal protections and therefore the Patent Office must be careful to prevent "bad" people from receiving patents even if they successfully invented something b) The Patent Office must closely watch over the actions of inventors with patents to make sure that they do not profit off their invention c) Inventions must pass a balance test by which they are placed on a table to see if they fall over d) Patents allow inventors to receive a return, but we need to make sure protection does not discourage future inventions

d) Patents allow inventors to receive a return, but we need to make sure protection does not discourage future inventions

According to Gresham's Law, bad money drives out good. How did this work in the early 1800s? a) The federal government would not quickly replace currency when it was starting to wear down b) People exported the coin whose metal was overvalued at the mint and imported the metal that was undervalued c) People will always try to counterfeit good currency and make it worth less d) People exported the coin whose metal was undervalued at the mint and imported the metal that was overvalued

d) People exported the coin whose metal was undervalued at the mint and imported the metal that was overvalued

Railroads were often accused of charging different prices to different people. This practice is specifically called ______. a) Price fixing b) Price competition c) Price monopoly d) Price discrimination

d) Price discrimination

What Act most likely provided the necessary number of people to allow the American Revolution to take place? a) Intolerable Acts b) Tea Act c) Sugar Act d) Quebec Act

d) Quebec Act

Why were the National BankingActs of 1863 and 1864 actually passed? a) Free banking was considered a failure and Congress wanted to get rid of all traces of it b) Wanted to create a central bank in order to regulate the banking industry and provide emergency liquidity c) Distract the population from the Civil War d) Raise money for the Civil War by creating a demand for government bonds

d) Raise money for the Civil War by creating a demand for government bonds

Which of the following does not describe free banking laws? a) Allowed anyone who met certain standards to start a bank b) Required bank notes to be fully backed by particular assets c) Disconnected politics from bank creation d) Set absolutely no requirements on everyday bank operations

d) Set absolutely no requirements on everyday bank operations

Which of the following is a given reason that extensive U.S. growth has slowed after 1840? a) U.S. land has steadily declined over time b) U.S. population growth has steadily increased over time c) New technology has not been developed in the U.S. d) The U.S. has focused on more capital deepening and less capital broadening

d) The U.S. has focused on more capital deepening and less capital broadening

Why specifically did the First Banking Crisis of the Great Depression begin in October of 1930? a) The uncertainty surrounding FDR taking office b) The stock market crashes of 1929 c) The Reconstruction Finance Corporation gave out the names of banks that borrowed money d) The failure of Caldwell and Company led to closures at connected banks

d) The failure of Caldwell and Company led to closures at connected banks

Why did the pyramiding of reserves lead to banking panics? a) The pyramid prevented an elastic currency by banning banks from loaning out money during panics b)The pyramid prevented banks from diversifying their loans across locations c) The pyramid helped to raise profits for banks and put them in a bad financial position d) The pyramid linked banks together and helped to transmit shocks

d) The pyramid linked banks together and helped to transmit shocks

Why did the Italian city-states dominate the early spice trade? a) They had expertise in spices because their cooking used more of them b) India was one of Italy's colonies due to the conquests of Alexander the Great c) Because of their geographic size, they were able to build the largest navy of any country d) They could travel on the Mediterranean Sea for a lot of the trip

d) They could travel on the Mediterranean Sea for a lot of the trip

How is total profit calculated? a) Total revenue b) Total revenue minus average total costs c) Total revenue minus variable costs d) Total revenue minus total costs

d) Total revenue minus total costs

Assuming the price of tires is higher in the rest of the world than in the U.S. and there are no tariffs, what would happen to tires prices in the U.S., the quantity of tires sold to consumers in the U.S., and the quantity of tires produced in the U.S.if the U.S. opened up to trade for the first time (i.e., the change from autarky)? a) U.S. prices and quantities would remain the same b) U.S. prices would decrease, domestic consumption would increase, and domestic production would decrease c) U.S. prices would increase,domestic consumption would increase, and domestic production would decrease d) U.S. prices would increase,domestic consumption would decrease, and domestic production would increase

d) U.S. prices would increase,domestic consumption would decrease, and domestic production would increase

A patent is an: a) exclusive right granted for a word, name, or symbol that indicates the source of the goods and to distinguish them from the goods of others b) exclusive right granted to an "original work of authorship" including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished c) exclusive right granted to avoid misdemeanor charges such as parking and speeding tickets d) exclusive right granted for a product or a process that provides a new way of doing something, or offers a new technical solution to a problem

d) exclusive right granted for a product or a process that provides a new way of doing something

The Agricultural Adjustment Act of 1933 kept crop prices high by _____? a) Seizing the land of any farmers who sold at low prices b) Giving free land to anyone who agreed to live and work it c) Had the government hire many workers to build roads and other infrastructure projects d) Having the government buy excess crops and pay some farmers not to grow them

d) having the government buy excess crops and pay some farmers not to grow them

Which of the following types of competition is likely to lead to the lowest price and highest quantity produced in the market? a) Collusion b) Monopoly c) Imperfect competition d) Perfect competition

d) perfect competition

While the first railroad was built in 1820, railroads did not overtake canals until the 1860's. Which of the following is not a reason for this slow replacement? a) It was more expensive to transport people and goods on rails than canals b) States protected their canal investments by preventing railroads from getting land or funding c) Initially railroad companies used different sized tracks so it was hard to travel quickly long distances on the same train d) People preferred canals because they offered year round service compared to partial-year service by railroads

d)People preferred canals because they offered year round service compared to partial-year service by railroads

Which of the following items is in M2 but not in M1? a) Government currency b) Travelers checks c) Demand deposits d) Time deposits

d)time deposits

A trademark is an: exclusive right granted for a product or a process that provides a new way of doing something, or offers a new technical solution to a problem exclusive right granted for a word, name, or symbol that indicates the source of the goods and to distinguish them from the goods of others exclusive right granted to an "original work of authorship" including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished exclusive right granted to avoid misdemeanor charges such as parking and speeding tickets

exclusive right granted for a word, name, or symbol that indicates the source of the goods and to distinguish them from the goods of others