Economcis Test 5

America's budget deficit reached a trillion dollars during the terms of which presidents? (choose all that apply)

1. Barack Obama 2. Donald Trump

What organizations are responsible for regulating financial markets in the United States? (choose all that apply)

1. Securities and Exchange Commission 2. Federal Reserve System

In the United States, the bulk of spending by the federal government goes to which of the following areas? (choose all that apply)

1. Social Security payments 2. national defense 3. interest payments on the national debt 4. goods and services, such as medical costs

Which of the following are reasons that private lenders are likely to make fewer mistakes than government lenders? (choose all that apply)

1. The money they're lending is their own or has been voluntarily entrusted to them. 2. Private money will only be invested where repayment with interest or profit is expected. 3. Private lenders are selected by a process of survival of the fittest.

According to Hazlitt, the fact that parity pricing for agricultural products was "merely a device for subsidizing a special interest" is proven by which of the following? (choose all that apply)

1. The refusal to universalize the principle of parity pricing. 2. When agricultural prices go above parity, there is no demand that the prices be decreased back to parity.

Hazlitt writes, "Government 'encouragement' to business is sometimes as much to be feared as government hostility." This "supposed encouragement" often takes which of the following forms? (choose all that apply)

1. a guarantee of private loans 2. direct grant of government credit

Which of the following are principal areas of focus for the Keynesian school of economics? (choose all that apply)

1. aggregate demand 2. price stickiness

Which of the following are ways that the United States government provides ongoing economic support? (choose all that apply)

1. assuring the nation's financial institutions remain healthy 2. promoting innovation and invention 3. supporting jobless workers with unemployment insurance

Which of the following are possible causes of a higher unemployment rate? (choose all that apply)

1. changes in the skills needed by employers 2. people changing jobs 3. cyclical fluctuations in the level of national spending

How many economic downturns occurred in the United States between 1855 and 2020?

33

Let's say that at the beginning of the year, $100 could buy 100 loaves of bread. By the end of the year, that $100 could only buy 95 loaves of bread. What was the rate of inflation for that year?

5%

Short Answer: In one sentence, define the term deficit. Your Answer:

A deficit is when there are more expenditures than total revenue.

The Federal ___________ Administration is a government organization that helps regulate transportation.

Aviation

Which presidential candidate issued a universal jobs guarantee during the 2020 Democratic primary?

Bernie Sanders

Who is considered the founder of Austrian economics?

Carl Menger

According to Hazlitt, parity prices for agricultural products might increase the purchasing power of farmers and help them be more prosperous, but what would the effect be on city workers?

City workers will have their purchasing power reduced.

Which school of economic thought holds close to the theories of Adam Smith and believes that the prices of products are largely a function of how much they cost to produce?

Classical school

Short Answer: In one sentence, define the term contractionary fiscal policy. Your Answer:

Contractionary fiscal policy is a policy that decreases government spending and increases taxes.

The payroll tax that funds Social Security and Medicare is called the _____ tax.

FICA

One major government service is building transportation infrastructure, such as roads and airports. The government also regulates this travel. Which of the following is a government organization that's responsible for regulating travel in the United States?

Federal Aviation Administration

What committee is responsible for conducting monetary policy?

Federal Open Market Committee

What United States president initiated an unprecedented spending spree during the Great Depression?

Franklin D. Roosevelt

The supervising body of the Federal Reserve that is responsible for providing general guidance to the Fed and supervising the regional banks is called the Board of ________.

Governors

Concerning full employment, Hazlitt writes that "the real question" isn't how many jobs there will be in the United States at a particular point in time. Instead, "the real question" is what?

How much will the nation produce, and what will be the standard of living?

The worst period of inflation in history occurred in 1946, when prices doubled every 15.6 hours in the nation of ___________.

Hungary

Short Answer: In one sentence, explain why inflation hurts people who have saved money. Your Answer:

Inflation hurts people who save money because the value of money decreases. Even though the people who saved money did not purchase or buy something, the money's value decreases overall. This means what might have cost 100 dollars now costs 120 dollars, depending on the inflation rate.

Hazlitt writes, "Even a relatively mild inflation distorts the structure of production." Why does he say this is the case?

Inflation results in the overexpansion of some industries at the expense of others, leading to a misapplication of capital.

Short Answer: In one sentence, explain why it's important to understand the federal government's economic goals? Your Answer:

It is important to understand the federal government's economic goals because policies are created with them in mind.

According to Hazlitt, which of the following would happen if money that had previously been used for saving was instead used to buy consumer goods?

It would decrease the price of capital goods.

Classical economists like Adam Smith believed the economy was self-correcting in the long run. Which economist argued that waiting for the economy to self-correct was foolish, saying, "In the long run we're all dead," and instead recommended strong action by the government to jump-start the economy?

John Maynard Keynes

Who popularized the theory of the paradox of thrift?

John Maynard Keynes

Which school of economic thought believes that the best way to reduce the length and severity of recessions is by increasing aggregate demand through government intervention?

Keynesian school

Short Answer: In one sentence, define the term market failure. Your Answer:

Market failure is when undesirable results occur in supply and demand.

The largest government healthcare program in the United States is __________.

Medicare

Which of the following taxes is considered a proportional tax?

Medicare payroll tax

Which school of economic thought was founded on the principles established by Milton Friedman?

Monetarist school

Which school of economic thought introduced the idea that consumers act rationally and attempt to maximize their marginal utility?

Neoclassical school

The largest stock market in the world is the _______________.

New York Stock Exchange

What does OSHA stand for?

Occupational Safety and Health Administration

Which organization protects workers by creating safer work environments?

Occupational Safety and Health Administration

What was the name of a 2011 movement that protested economic inequality?

Occupy Wall Street

Match each American recession with its description. The Oil Crisis Recession

One factor that caused this recession was the introduction of wage and price controls.

Carl Menger, considered to be the founder of Austrian economics, wrote ________________ in 1871.

Principles of Economics

Short Answer: In one sentence, define the term progressive tax. Your Answer:

Progressive tax is where taxation is paid at a higher rate for higher incomes.

In one sentence, explain why roads are built by the government. Your Answer:

Roads are built by the government to properly regulate interstate transportation.

What was the first federal law to make trusts illegal?

Sherman Antitrust Act of 1890

The most famous work written by John Maynard Keynes was _______________.

The General Theory of Employment, Interest, and Money

What does Hazlitt say about the rate of tax imposed by inflation?

The rate is not a fixed one and cannot be determined in advance.

Concerning full employment, Hazlitt writes that "the real question" isn't how many jobs there will be in the United States at a particular point in time. Instead, "the real question" is what? Your Answer:

The real question is the economic gain through labor.

Short Answer: In one sentence, list the two primary fiscal policy strategies used to combat slow growth and high unemployment. Your Answer:

The science and art of military command as applied to the overall planning and conduct of warfare.

Why does Hazlitt say that advocates of parity pricing for farmers picked the years 1909-1914 as the basis of parity?

The years were one of the most favorable periods for agriculture in history.

Which of following is a consequence of individuals not being free to use their possessions as they choose?

They might not be able to act in ways that create more efficiency and wealth.

Which special interest group spent the most money lobbying the American government in 2018?

US Chamber of Commerce

Why is contractionary fiscal policy rarely used?

Voters don't like tax increases, and politicians who pass such laws risk being voted out of office.

Why is contractionary monetary policy rarely used?

Voters don't like tax increases, and politicians who pass such laws risk being voted out of office.

What is price stickiness?

a condition in which market prices change slowly in reaction to changes in supply and demand

A legal agreement enforceable by law is called a __________.

contract

One potential cause of unemployment is seasonal fluctuations in _________.

demand

An extremely long and severe economic contraction is called a(n) _________.

depression

Raising the reserve requirement will lead to __________ interest rates.

higher

Hazlitt writes that "savings" can be defined as the available supply of new capital, and "investment" can be defined as the demand for new capital. Just like supply and demand determines the price for anything else, supply and demand determines the price that savers are paid for loaning out their money. What does Hazlitt say is "the special name for the price of [this] loaned capital"?

interest rate

Hazlitt admits that inflation might sometimes be able to correct the causes of an economic depression, but that it is a "dangerous method" because ____________.

it makes its corrections not openly and honestly, but by the use of illusion

Antitrust laws are laws that are created to ________________.

prevent monopolies and encourage competition

A sales tax is a tax that's levied when an item is sold, whereas an excise tax is a tax that's levied when an item is __________.

produced

In the story about Milton Friedman visiting an overseas construction site, Friedman suggests that more jobs could be created by taking away the workers' shovels and giving them _______.

spoons

When soldiers are discharged from the military and become private citizens, it will increase total national production because _______________.

the soldiers will become self-supporting and get paid for producing additional goods and services

Contractionary fiscal policy is beneficial when the economy is growing at a greater rate than ____________.

two to three percent per year

In Chapter 9, Hazlitt writes that the justification for public jobs like police officers, firefighters, judges, and legislators "does not consist in the 'purchasing power' they possess by virtue of being on the public payroll," but instead "consists in the _______ of their services."

utility

As of 2019, there is over ______________ of federal student loan debt in the United States.

$1.5 trillion

America's national debt rose from $5.5 trillion in 2000 to _________ by the end of 2019.

$23 trillion

By the end of 2019, the national debt of the United States reached __________.

$23 trillion

According to Hazlitt, what were the main arguments for parity prices for agricultural products? (choose all that apply)

1. Agriculture is the most basic and important of all industries. 2. The prosperity of everybody else depends upon the prosperity of the farmer. 3. If the farmer doesn't have enough purchasing power to buy industrial products, then industry will suffer.

Why do consumers reduce their buying after an economic downturn has started? (choose all that apply)

1. Because they fear they may lose their jobs. 2. Because prices of goods have already fallen, and they fear a further fall.

Hazlitt writes about an example of government spending where bureaucrats want to build a new bridge connecting two towns, even when existing bridges can easily handle the current traffic. What are the arguments made for building the bridge even though it isn't needed? (choose all that apply)

1. Building the bridge will provide employment. 2. The bridge will exist thanks to government spending, when otherwise it wouldn't have.

According to Hazlitt, what happens when the government tries to save a particular industry by giving it a direct subsidy? (choose all that apply)

1. Capital and labor are driven out of efficient industries and into less efficient industries. 2. Wealth is transferred from other industries to the subsidized industry. 3. Less wealth is created.

During the Great Recession, the federal government employed fiscal policy to try to stimulate the economy. Which of the following are examples of legislation that Congress passed to try to turn around the economy during the Great Recession? (choose all that apply)

1. Economic Stimulus Act of 2008 2. American Recovery and Reinvestment Act of 2009

According to Hazlitt, which of the following are necessary for the health of a dynamic economy? (choose all that apply)

1. Growing industries should be allowed to grow. 2. Dying industries should be allowed to die.

According to Hazlitt, which of the following are true about hoarding? (choose all that apply)

1. Irrational hoarding of cash is harmful in most economic situations. 2. Dishoarding, as people die and their hoards are discovered by others, likely offsets new hoarding.

According to Hazlitt, which of the following are effects of keeping interest rates artificially low? (choose all that apply)

1. It increases the demand for capital. 2. It encourages highly speculative ventures.

Which of the following would happen if the Federal Reserve raised the reserve requirement? (choose all that apply)

1. It would lead to higher interest rates. 2. It would reduce the amount of money banks could lead.

What happens when providing employment becomes the primary reason (the end instead of the means) for government spending? (choose all that apply)

1. Need becomes a subordinate consideration. 2. Government projects have to be invented.

Which of the following are arguments made against OSHA? (choose all that apply)

1. OSHA's regulations disrupt the market forces of supply and demand. 2. OSHA creates many superfluous regulations that do little to improve worker safety. 3. OSHA regulations hurt both workers and consumers.

Increased taxes reduce the economic incentives for business success. Which of the following are consequences of these reduced incentives? (choose all that apply)

1. People are deterred from starting new enterprises. 2. Existing businesses don't give new employment. 3. Potential entrepreneurs decide not to become new employers. 4. Improved machinery and technology are developed more slowly. 5. Real wages are held down. 6. Consumers are prevented from getting better and cheaper products.

According to Hazlitt, what are the differences between loans provided by government agencies and loans provided by private lenders? (choose all that apply)

1. Private lenders risk their own money, whereas government agencies risk other people's money. 2. Government agencies will take more risks than private lenders.

According to Hazlitt, which of the following are true about new capital? (choose all that apply)

1. Producers invest in new capital goods because they reduce the costs of production. 2. Even if a greater quantity of goods isn't needed, new capital can create goods of improved quality.

Which of the following Congressional acts together established the Securities and Exchange Commission? (choose all that apply)

1. Securities Act of 1933. 2. Securities Exchange Act of 1934.

According to Hazlitt, many proponents of inflation realize that it will decrease the purchasing power of money and increase the prices of goods and services. What are reasons these proponents of inflation want inflation anyway? (choose all that apply)

1. They believe it's an essential measure to cure a depression. 2. They believe it will jump-start industry and lead to full employment. 3. They believe it will stimulate imports and discourage exports. 4. They believe it will improve the position of creditors as compared with debtors.

According to Hazlitt, which of the following are true, in general, about the individuals selected for government loans? (choose all that apply)

1. They will be poorer risks than the individuals selected for private loans. 2. More money will be lost by loans to these individuals. 3. There will be a higher percentage of failures, or defaults, on these loans. 4. These individuals will be less efficient and waste more resources.

According to Hazlitt, what happens when the government tries to save a particular industry (Hazlitt calls it the "X industry") by giving it a direct subsidy? (choose all that apply)

1. Wealth is transferred from other industries to the subsidized industry. 2. The average standard of living is lowered. 3. Capital and labor are driven out of efficient industries and into less efficient industries.

Which of the following are arguments made in defense of OSHA? (choose all that apply)

1. Workplace injuries and deaths have declined dramatically since OSHA was created in 1971. 2. Workplace injuries and deaths create negative externalities. 3. Workers don't fully understand the risks of certain jobs.

Which of the following are examples of international economic institutions? (choose all that apply)

1. World Bank 2. International Monetary Fund

Which of the following are examples of supply-side policies the government can use to encourage economic growth and lower unemployment? (choose all that apply)

1. deregulation 2. job training programs

In the discussion of maximizing employment versus maximizing production, Hazlitt writes that "production is the _____, employment merely the _____."

1. end 2. means

In the United States, the federal government is mostly funded by which of the following types of taxes? (choose all that apply)

1. excise taxes 2. tariffs 3. fees 4. individual income taxes 5. payroll taxes 6. corporate income taxes

Which of the following taxes are considered progressive taxes? (choose all that apply)

1. federal income tax

Which of the following are consequences of the government getting deep into debt? (choose all that apply)

1. fewer economic opportunities 2. less fiscal flexibility

In the United States, government welfare services include which of the following programs? (choose all that apply)

1. food stamps 2. unemployment benefits 3. public housing

The major excise taxes in the United States are on which of the following products? (choose all that apply)

1. gasoline 2. alcohol 3. tobacco

What are the results of contractionary fiscal policy rarely being used? (choose all that apply)

1. high inflation 2. increased government debt

One consequence of high government debt is reduced investment. The government will have to spend much of its budget on interest payments instead of making investments in areas such as infrastructure, education, and research. Which of the following are ultimately consequences of reduced investment? (choose all that apply)

1. increased debt 2. less tax revenue 3. slower economic growth 4. increased deficits

Which of the following are consequences of contractionary monetary policy rarely being used? (choose all that apply)

1. increased government debt 2. high inflation

Which of the following are examples of monetary policy strategies the government can use to encourage economic growth and lower unemployment? (choose all that apply)

1. increasing the money supply 2. lowering interest rates

According to Hazlitt, the belief that government loans for farmers are beneficial comes from which of the following "acts of shortsightedness"? (choose all that apply)

1. looking at the matter only from the standpoint of the farmers that borrow 2. thinking only of the first half of the transaction

What factors affect the different phases of the business cycle? (choose all that apply)

1. monetary policy 2. technological change 3. consumer-producer confidence 4. fiscal policy

Inflation has a positive impact on which of the following groups? (choose all that apply)

1. people who own homes 2. people who've borrowed money at fixed rates

Inflation has a negative impact on which of the following groups? (choose all that apply)

1. people with a lot of savings 2. people living on a fixed income

Government legal protection includes which of the following services? (choose all that apply)

1. protecting property rights 2. enforcing weights and measures 3. enforcing contracts

In the United States, the bulk of spending by local and state governments goes to which of the following areas? (choose all that apply)

1. public safety 2. public welfare 3. public education 4. road construction and repair

Which of the following taxes are considered regressive taxes? (choose all that apply)

1. sales tax 2. Social Security payroll tax

In the United States, state governments are mostly funded by which of the following types of taxes? (choose all that apply)

1. sales taxes 2. income taxes

One consequence of the government borrowing a lot of money is reduced investment. The government will have to spend much of its budget on interest payments instead of making investments in areas such as infrastructure, education, and research. Which of the following are ultimately consequences of reduced investment? (choose all that apply)

1. slower economic growth 2. larger deficits

Which of the following are services provided by the Federal Reserve? (choose all that apply)

1. supplying banks with paper money and coins 2. protecting consumers through regulation and education 3. processing checks and electronic payments

Which of the following are main goals of the Securities and Exchange Commission? (choose all that apply)

1. to protect investors 2. to ensure that financial markets are fair, orderly, and efficient 3. to encourage the creation of capital resources

Which of the following are reasons why governments redistribute wealth? (choose all that apply)

1. to satisfy individuals and groups who aren't satisfied with the current distribution of income in the economy 2. to create a safety net and help impoverished citizens who are in need

Which of the following are negative consequences of an economy that is growing too quickly? (choose all that apply)

1. unsustainability 2. asset bubbles

At the beginning of the year, $100 could buy 100 loaves of bread. By the end of the year, that $100 could only buy 90 loaves of bread. What was the percentage of inflation for that year?

10%

How many regional Federal Reserve banks are there?

12

In the United States, the highest level of inflation since the Great Depression occurred in 1979. What was the percentage of inflation in 1979?

13%

The Tax Cuts and Jobs Act of 2017 changed the corporate income tax from 35% to __________.

21%

At the height of the Great Depression in 1933, the unemployment rate reached a high of ________.

24.9%

Hazlitt discusses the fact that the Tennessee Valley Authority increased prosperity in its region. Why does he say this isn't surprising and shouldn't be regarded as a miraculous result of government spending?

Because taxes were taken from other parts of the country and concentrated in this one section.

What happens when new capital and new labor are forcibly kept out of a particular industry?

Both capital and labor are less efficiently employed.

Match each American recession with its description. The Great Depression

During this economic downturn, unemployment reached a height of 24.9%.

In the United States, the federal organization tasked with protecting human and environmental health is the __________ Protection Agency.

Environmental

The government plays an important role in keeping private companies accountable and preventing them from causing excessive pollution. In the United States, the federal organization tasked with protecting human and environmental health is the _________________.

Environmental Protection Agency

Which organization protects the environment by establishing regulations that limit pollution?

Environmental Protection Agency

What is the primary federal organization responsible for enforcing antitrust laws and preventing anti-competitive practices?

Federal Trade Commission

________ policy refers to changes in federal taxation and spending that are designed to influence the economy.

Fiscal

Which organization protects consumers by ensuring their food and medicines are safe?

Food and Drug Administration

In one sentence, explain why higher interest rates reduce inflation. Your Answer:

Higher interest rates reduce inflation because the money must be saved in order to purchase other goods as well as properly produce and developed goods.

According to Hazlitt, what was one effect of the government's attempt to fix the price of coal above its market value?

It led to consumers substituting other sources of power or heat, such as oil or natural gas.

What does the United States government do when the budget is in deficit?

It sells securities to individuals, corporations, financial institutions, and other governments.

Which school of economic thought believes the government's role in the economy is to control inflation through monetary policy but rejects the idea that the government can control demand?

Monetarist school

An example of international economic institution is the IMF, or International __________ Fund.

Monetary

One of the American government's ongoing economic policies is assisting research through grants and programs. Which of the following agencies is an example of such programs?

National Institutes of Health

The corporate income tax was reduced from 35% to 21% by the ________________.

Tax Cuts and Jobs Act of 2017

What American recession was triggered by a subprime mortgage crisis, which led to a bank credit crisis?

The Great Recession

Compare and contrast the Keynesian and Austrian schools of economic thought. Who were the founders of these schools, and what are the main ideas of each school? Your Answer:

The Keynesian economic school of thought is based on the philosophies of John Keyne and advocates for government intervention using price stickiness and aggregate demand. Austrian schools, founded by Carl Menger, argue that government intervention would hurt the economy, which directly contrasts with Keynesian economics.

Short Answer: In one sentence, define the term property rights. Your Answer:

The right of property use for an individual.

Match each American recession with its description. The Panic of 1893

This economic contraction was set off by the failure of the Philadelphia and Reading Railroad.

Match each American recession with its description. The Great Recession

This recession was triggered by a subprime mortgage crisis, which led to a bank credit crisis.

List the three economic goals that are collectively referred to as the Federal Reserve's mandate. Your Answer:

Three goals of the Federal Reserve's mandate are to manage healthy trades between stocks and bonds, and manage the interest rates and economic incentives for producers.

Keynesian economists believe that decreased __________ is the main cause of recessions.

aggregate demand

Which of the following scenarios would likely result in cost-push inflation?

an increase in the minimum wage

The finer points of America's federal budget are first debated in twelve _____________.

appropriations committees

The unemployment rate refers to the percentage of the total workforce who both aren't working and ______________.

are actively seeking paid work

Why does Hazlitt say, "Inflation is the opium of the people"?

because inflation deceives almost everyone, including those who suffer from it

An event where assets like housing, oil, or gold increase significantly, beyond their actual value, is called an asset ________.

bubble

According to the video, one factor that affects the different phases of the business cycle is consumer-producer _____________.

confidence

Hazlitt writes, "The most obvious . . . error on which the appeal of inflation rests" is _________________.

confusing money with wealth

Hazlitt argues that saving is not a cause of depressions but is instead a(n) __________ of depressions.

consequence

The period of the business cycle where growth slows down and unemployment increases is called the ____________ phase.

contractionary

When businesses raise prices to cover increasing costs, it results in ____________.

cost-push inflation

Those who advocate for government lending believe that extending credit to individuals will help them prosper. However, an important point these advocates of government lending forget is that all credit is _________.

debt

When a borrower stops making payments on their loan for several months, the loan is considered to be in __________.

default

Monetary inflation can create a chain reaction that results in even more inflation. This occurs because monetary inflation can cause ___________ inflation when people recognize that the value of their money is going to decline in the future.

demand-pull

Monetary inflation can create a chain reaction that results in even more inflation. This occurs because monetary inflation can cause _______________ when people recognize that the value of their money is going to decline in the future.

demand-pull inflation

When demand for goods and services becomes greater than supply, it results in _________.

demand-pull inflation

When a bridge is built using taxpayer funds, the result is a _________.

diversion of jobs

Nearly all market economies experience long-term growth because of ___________.

economic incentives

Higher interest rates ____________ saving.

encourage

Which of the following is a way that governments combat negative externalities, such as environmental damage?

establishing regulations

What is a cost or benefit that is paid or received by individuals who have no control over the creation of that cost or benefit?

externality

Markets where securities are traded are collectively known as __________ markets.

financial

A notable social service program that redistributes income is the Supplemental Nutrition Assistance Program, formerly known as ____________.

food stamps

Traders can exchange different currencies on the __________.

foreign exchange market

Hazlitt argues that "nothing is easier to achieve than full employment" when it's "taken as an end to itself" instead of being tied to the goal of _______________.

full production

A failure that occurs when the cost of solving a market failure is greater than the benefit is a _________ failure.

government

What is the solution for the market failure of public goods?

government control over public goods

Keynesian economists believe that the best way to reduce the length and severity of recessions is by increasing aggregate demand through _________________.

government intervention

In his discussion of public works, Hazlitt writes, "There is no more persistent and influential faith in the world today than the faith in ______________."

government spending

When the Federal Reserve sells securities to banks, it leads to ___________ interest rates.

higher

The Consumer Price Index measures inflation by looking at a selection of common goods. The three main categories of goods covered by the CPI are food and beverages, clothing, and __________.

housing

The Great Recession was partially caused by an asset bubble in the ________ market.

housing

Inflation occurring at an extremely high rate is called __________.

hyperinflation

When government revenues exceed government expenditures, the federal budget is considered to be __________.

in surplus

If the discount rate is low, the overall money supply will __________.

increase

What is usually a downside of lowering taxes and increasing government spending?

increased government borrowing

Which of the following scenarios would likely result in demand-pull inflation?

increased government spending

Keynesian economists use the idea of price stickiness to defend their policies of ___________.

increased government spending and an expanded money supply

Hazlitt writes that "savings" can be defined as the available supply of new capital and that "investment" can be defined as the demand for new capital. Just like supply and demand determines the price for anything else, supply and demand determines the price that savers are paid for loaning out their money. What does Hazlitt say is "the special name for the price of [this] loaned capital"?

interest rate

What government economic strategy reduces taxes on businesses who invest in increasing their productivity?

investment tax credits

One argument made against reducing the bureaucracy is that it would hurt the economy by reducing the purchasing power of the dismissed officeholders. What fallacy causes this argument to be made?

looking only at the effects on one group, the dismissed officeholders, instead of the effects on everyone

The Federal Reserve's goals of helping America achieve stable prices, economic growth, and full employment is referred to as the Fed's ____________.

mandate

A failure that occurs when the forces of supply and demand yield results that society finds undesirable is a ________ failure.

market

In the discussion of maximizing employment versus maximizing production, Hazlitt writes that "production is the end, employment merely the ______."

means

When the money supply increases more than the output of goods and services increases, it results in _________.

monetary inflation

The sum total of all the money the government owes is referred to as the __________.

national debt

Hazlitt writes that the "pleasant dreams" of government being able to spend without taxing and being able to endlessly pile up debt "have always been shattered by" what?

national insolvency or runaway inflation

Hazlitt writes that the "pleasant dreams" of the government being able to spend without taxing and being able to endlessly pile up debt "have always been shattered by" what?

national insolvency or runaway inflation

The government operates many public buildings, such as libraries and courthouses, as well as many public _____, including Yellowstone and Yosemite.

parks

Which of the following is an example of a good or service that would not be profitable for the private sector to provide because non-payers would reap the benefits as much as the payers would?

police protection

An externality in which individuals receive a benefit that they had no part in creating is a ___________ externality.

positive

Companies whose stock is freely traded on a stock market are called _______ companies.

public

Goods that benefit non-payers as well as payers are called _____________.

public goods

Large-scale asset purchases in which a central bank buys government bonds or other financial assets from commercial banks and other financial institutions is known as _____________.

quantitative easing

A long economic contraction, defined by some economists as a contraction lasting more than six months, is called a(n) ____________.

recession

Which of the following is a way that governments combat the market failure of inequity?

redistributing income

A tax in which people with lower incomes pay a higher tax rate is called a(n) ___________.

regressive tax

Hazlitt writes that inflation "is a tax not only on every individual's expenditures" but also on every individual's __________________.

savings account and life insurance

A tradable financial asset, such as a stock or bond, is called a ________.

security

The official unemployment rate in the United States includes any individuals over the age of __________ who are working for pay or seeking paid work.

sixteen

Which of the following is an example of a positive externality?

solar power

In Chapter 9 of Economics in One Lesson, Hazlitt discusses that there is often a fear that there won't be enough jobs for soldiers when they return to the workforce after a war. Hazlitt admits that it may require some time for private industry to provide jobs for all these new workers. He writes that, in the past, the "chiefly remarkable" thing about getting jobs for all the former soldiers has been the _____ with which the process was accomplished.

speed

According to Hazlitt, saving is merely a different form of ___________.

spending

Of the following investments, which has historically had the best performance over the long term but suffers from more volatility?

stocks

Government policies designed to create economic growth by increasing productivity and efficiency are called ____________.

supply-side policies

Taxes on imported goods are called ______________.

tariffs

Which of the following describes the concept of parity pricing in the 1930s and 1940s?

the desire to raise the prices of agricultural products to "parity" with the prices of the products that the farmer buys

Contractionary fiscal policy can be beneficial when the economy is growing at a greater rate than ____________.

two to three percent per year

The government protects consumers by enforcing standards of measurement called ______________.

weights and measures

According to Steven Horwitz, the theories of Austrian economics emerge from _________________.

what we can know empirically about human beings