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