MGT 1050 Final

Patenting is important for economic growth, but is subject to a "balancing act". Why is this the case?

****a) The Patent Office needs to encouraging initial invention, but make sure protection does not discourage future inventions b) 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 c) The Patent Office must closely watch over the actions of inventors with patents to make sure that they do not profit off their invention d) The Patent Office must make sure that inventors who die are not preventing people from using their inventions

Which of the following best describes the U.S. Constitution?

a) A National System b) Compromise between National and Federal Systems****** c) A Federal System d) Remarkably similar to the Articles of Confederation

Why would you not want to produce with a reaper if you had a small farm?

a) A farmer would be done with their fields too quickly and have too much free time on their hands b) A farmer would have to work extra hours with the reaper in order to clear their field c) A farmer had no place to store the reaper outside of harvest season ****d) A farmer would not be able to produce enough to pay down the high fixed costs of buying a reaper

_______ describes a bank that is willing to lend to illiquid but solvent banks during a crisis?

a) A free bank b) A lender of last resort****** c) Open market operations d) Margin lending

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?

a) A large number of banks entering each year b) Strict rules and supervision on everyday bank activities c) Relatively slow growth in the number of banks****** d) An open system where anyone could start a bank

In his Report on a National Bank, Hamilton made several claims in support of establishing a National 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 establish more commercial banks and avoid political favoritism****** c) A national bank would help grow the stock of money without needing international trade d) A national bank would assist the government in making and collecting payments

Which is the most likely example of a design patent?

a) A patent on a new machine that produces soda cans for cheaper ****b) A patent on the shape of the new VolksWagen Beetle car design 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

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) Many countries sent goods to the U.S. in order to be reexported to the warring countries************ d) The U.S. exported anti-British propaganda in order to support their French brethren

The pyramiding of reserves describes _______?

a) A system where bank reserves have to be kept fully in the vault at the bank b) A system where banks were allowed to keep reserves in other banks in larger cities******** c) An Egyptian system of banking d) A system where banks have no reserve requirements

The Economist Article "Breaking the Wave" examined the wave of American mergers and acquisitions during the last decade. The article suggests that this wave might be coming to an end. In addition to potential anti-trust legislation, they highlight what factor is driving this?

a) Activist investors are pushing back against mergers and acquisitions**** b) Mergers and acquisitions have been dramatically lowering corporate profits c) Companies do not anticipate that the recent tax cuts will stay in place d) Fear over the US-China trade war

Which of the following is not an example of the "tragedy of the commons"?

a) Air pollution by manufacturing plants b) Reduction of available water sources downstream because of excessive use of water by upstream individuals c) A CEO who destroys his company's machines by running them too long****** d) Cell phones going off in class

We argued that American technology was not necessarily superior to the British. Why was this the case?

a) America and Great Britain wanted to produce different types of goods b) 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 *****c) 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 d) America and Great Britain had high barriers to technology flow and no technology could be exchanged

The Economist article titled "Shock Therapy" argued that tariffs on China disrupted business and politics but have not harmed the economy at large by the time the article was written. What was the author's reasoning?

a) Americans produce few manufactured goods b) Americans consume relatively few Chinese goods c) Americans believe that the tariffs will be short-lived d) Tariffs had not been placed on many consumer goods********

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 large group of academics working together in a laboratory c) Government research labs d) 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

The Economist Article "Making it in America" examined manufacturing in the U.S.. It highlighted how certain types of companies were failing at producing in the U.S. while other types were succeeding. Which of following best characterizes those two divisions?

a) Automobile and metals industries have tended to fail, while electronics have succeeded b) Intellectual property have tended to fail, while services have succeeded c) Services have tended to fail, while intellectual property have succeeded d) Electronics have tended to fail, while automobile and metals industries have succeeded******

Why did people use bank notes in a large number of transactions before the Civil War?

a) Bank notes were backed by assets and thus were very safe b) There was always a central bank that was willing to exchange the notes at full value c) Bank notes were required to be paid in hard currency when presented at any bank in the country d) There was relatively little gold and silver coins available in circulation********

How do commercial banks multiply up the amount of currency in an economy to become M1?

a) Banks issue credit cards b) Banks use deposits to provide loans which puts money back out into circulation to create more deposits******* c) Banks coin money and print federal currency d) Banks help people manage their money and invest in bonds and stocks

What is the "originate to distribute" model?

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

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

How did the Confederation primarily fund the Revolutionary War?

a) Borrowing from France b) Tax on wealthy citizens c) Printing paper money****** d) Seizing goods from the Spanish and Indians

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 fee simple system could only be utilized on such a system d) The system's precise boundaries prevented land disputes******

Granitz and Klein (1996) examine how Standard Oil succeeded in buying out the other Cleveland refiners and preventing new refiners from entering. They argue this was achieved by what?

a) By paying a high price for each firm b) By having a monopoly over refiners in other locations c) By making deals with railroads to receive rebates for any oil shipped by their competitors***** d) By having politicians force their competitors to sell

What did the Northwest Land Ordinances of 1785 do?

a) Carried out the Louisiana Purchase b) Setup how individual territories could become states c) Allocated the former land of Quebec to the newly established states d) Established surveyors to set baselines and principle meridians*******

In common language, Bagehot's Rule argues which of the following?

a) Central banks should always help bailout banks regardless of whether they are solvent b) Central banks should allow banks to fail in order to avoid future banking issues c) Central banks should provide as much money as solvent banks want during panics************ d) Central banks cannot lessen financial panics once they have started

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) 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) Inventing a new railroad locomotive that could travel across different sized tracks

The Economist article "Skeletons in the closet" discusses the run on the Punjab and Maharashtra Cooperative Bank in India. What was the cause of the bank's collapse?

a) China devalued its currency b) Depositors were worried about political unrest c) The bank's loans were highly undiversified******* d) There was a major stock market crash that reduced asset values

Clearinghouses provided some help to locations during financial panics. Which of the following best describes this approach?

a) Cleared all bank notes and checks at full face value from throughout the U.S. b) Paid out government loans to individuals c) Provided emergency liquidity to members********** d) Gave out large checks to people based on a lottery system

Standard Oil fortified their management by shifting from a trust structure to a holding company structure. What was the reason for this switch?

a) Congress passed the Clayton Antitrust Act b) Rockefeller wanted to cut all his partners out of the business and obtain all the money for himself c) Standard Oil needed a way to show off to stockholders even if it did not help the company d) Wanted to create a sing***

Assuming the price of cell phones is higher in the rest of the world than in the U.S. and U.S. trades with others but has tariffs in place, which of the following would happen to the consumer surplus and producer surplus in the U.S. economy if President Trump removes the tariff on cell phone imports from all other countries?

a) Consumer and producer surplus would both remain the same****** b) Decreased consumer surplus and increased producer surplus c) Increased consumer surplus and decreased producer surplus d) Consumer and producer surplus would both increase

What is the reasoning for why modern governments focus on production and no longer consider mercantilism to be important?

a) Countries can produce nearly every good that they would want due to increased technology b) Gold and silver are more readily available and thus every country has more than enough c) Free trade makes economies better off***** d) Countries grew tired of war and world-wide peace has emerged

While most economists focus on the number of patents, Moser (2005) examined whether patents affect the types of innovation that occur within a country. What does she find?

a) Countries without patent protection were mostly located in Asia b) Countries without patent protection did not send any inventions to be studied c) Countries without patent protection focused on inventions that were not easily copied**** d) Countries without patent protection focused on a wide range of inventions

Why did the financial innovations of the 1990s and 2000s help lead to the Great Recession?

a) Decreased the amount of leverage and debt in the economy b) Greatly increased the amount of liquidity that banks were holding c) Spread housing market risk across the entire financial network********* d) They increased economic inequality

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

What was the reasoning behind the actions of the Fed and Congress during the Great Recession?

a) Did not want to make the same mistakes of the Great Depression and wanted to stop bank runs b) Obama wanted to decrease the number of banks in the country and thus allowed them to close c) Bush wanted to own a large number of banks and firms to increase his income after his presidency d) The Senate pushed to the government to spend its huge budget surplus rather than cut taxes********

How is economic development different from economic growth?

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

Most tech companies are located near Silicon Valley, most Hedge Funds are located near New York City, and most car companies are located near Detroit because firms are often more efficient when they operate around other similar firms. This concept is labeled what?

a) Economies of scale b) Labor-saving mechanization c) Agglomeration economies****** d) Specialization

Electricity is fairly efficient, but what is its main drawback?

a) Electrical machines are much more likely to explode *****b) Needs to be around an area that has invested in an electrical system c) It is seasonal and could only be used during certain months d) Needs access to coal

How did the Panic of 1907 end?

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

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) The outbreak of European fighting in WWII c) People withdrawing money from their bank accounts to purchase the newly released TV d) Congress reducing expenditures and the Fed raising reserve requirements thinking the crisis was over***********

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 that Hamilton gave?

a) Foreign governments were supporting their own manufacturers b) The U.S. needed a positive trade balance in order for it succeed relative to others****** c) Foreign manufactures had a head start and could out compete young U.S. manufacturers d) Foreign countries protected their manufacturers through tariffs and restrictions on technology exports

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) Non-Monetary Effects; Monetary Effects d) Monetary Effects; Non-Monetary Effects*******

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) Working to solve calculus equations******* c) Learning fundamental principles, generalizations, or theories d) Learning to apply course materials to improve rational thinking, problem solving, and decisions

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

Which one of the following items is included in M2 but not in M1?

a) Government currency b) Travelers checks c) Time deposits d) Demand deposits****

What are bank notes actually?

a) Government currency with famous bank presidents on their front b) State issues of currency c) Counterfeit currency d) IOUs of individual banks*******

Why is more growth not always better?

a) Growth always leads to economic inequality which makes some people worse off b) Growth can sometimes lead to externalities that hurt individuals that were not party to the growth**** c) Growth leads to more conflict with other countries d) Growth leads countries away from capitalist

Why was the Federal Reserve broken into 12 different districts?

a) Had to swing political votes from all across the country b) Bankers throughout the country lobbied to have their own slice of power c) No one city could support the large number of economists, bankers, and researchers needed to carry out the Fed d) Wanted the Fed to properly represent local interests and concerns*********

After the Revolutionary War, the British started to dump goods at very low prices on U.S. market. Why would this make sense?

a) Had too many goods in inventory and needed to get rid of them b) Had to get rid of old fashions and other items that were not in style c) Had to support their former colony in their newfound freedom d) Hope to prevent any U.S. manufacturers from developing******

The Agricultural Adjustment Act of 1933 kept crop prices high by _____?

a) Having the government take the land of any farmers who sold at low prices b) Giving free land to anyone who agreed to live and work it c) Having the government buy excess crops and pay some farmers not to grow them******** d) Having the government hire workers to build roads and other rural infrastructure projects

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 with this gold legislation?

a) He wanted to prevent the money supply and prices from falling further********* b) He wanted to have all the gold coins put in a money bin that he could swim in c) He wanted to fully fund all his New Deal programs d) He wanted to prevent Hitler from controlling the world's gold supply during WWII

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 was a Republican d) He did not establish federal work relief (i.e., government paying people to work)**********

Based on the Harvard case study, what role did Henry Ford play in the start of the Panic of 1933?

a) Henry Ford refused to allow some of his deposits to be frozen in local banks******** b) Henry Ford's bankruptcy led to a stock market crash and local decline c) Henry Ford's failed take-over of Guardian Detroit Union Group started a stock market run d) Henry Ford withdrew his money from Detroit banks and started a panic

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) Allowing them to make other products at the same time d) Improving worker safety

Ford's strategy was successful in the market, but what was his strategy's distinct problem?

a) His $5 a day plan raised wages by so much that he could not produce the lowest priced car b) His focus on the assembly line and economies of scale prevented him from innovating on the car itself or quickly implementing new technology***** 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 fully optimize production

Allen (1991) argues which of the following:

a) Homesteading allowed the U.S. government to avoid high costs associated with land maintenance******** b) Homesteading brought land into private hands too quickly c) Homesteading was inefficient and did not provide sufficient government resources d) Homesteading allowed farmers to reap extraordinarily high profits as a result of cheap land

Which of the following describes when companies purchase their own supply chain?

a) Horizontal integration b) Backwards linkages c) Vertical integration**** d) Forward linkages

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) New car sales in the U.S. d) Steel sold in the U.S. to eventually be used in the construction of houses******

Despite canals and some railroads, most farmers sent their goods on rivers before 1860. What innovation most transformed travel times and costs along the rivers?

a) Improved docking facilities b) Improved river conditions c) Government regulation d) Fulton steam engine*****

The Annapolis Convention of 1786 was held for what explicit reason?

a) Increase the communication between various state leaders b) Help eliminate trade barriers existing in between states****** c) Lay the foundation for the eventual U.S. constitution d) Officially end the Revolutionary War

Assuming the price of cars is lower in the rest of the world than in the U.S. and U.S. freely trades with others, 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?

a) Increased price, decreased domestic production, decreased domestic consumption b) Nothing would occur in the U.S. c) Increased price, increased domestic production, decreased domestic consumption******* d) Decreased price, decreased domestic production, increased domestic consumption

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) Increased the standards associated with lending b) Created a large number of mortgage backed securities********* c) Created a large number of credit default swaps d) Took over bank supervision from the Fed

How does the arrival or improvement of transportation affect competition in general?

a) Increases competition because multiple firms serve the same market despite being located other places******* b) Leaves competition the same because firms only serve their original customers regardless of the potential to sell to customers in new areas c) Decreases competition because firms can offer a cheaper price to local customers and thus the entry of new firms is discouraged d) There is no other potential answer

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

In the Quantity Theory of Money equation, velocity is _____?

a) Inflation b) Money Supply c) Ease of using money***** d) The stability of banks

In the absence of 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?

a) Issued large amounts of safe bank notes to push out bad bank notes b) Established relationships among banks and forced them to redeem each other's notes at par******* c) Purchased stock of other banks in order to control their actions d) Were given power by state legislatures to punish banks whose notes traded below their par value

Which of the following was a drawback of government land grants to fund railroads?

a) It did not encourage railroads to bring out people to settle the west b) It had large direct costs for the government c) It did not prevent railroads from building wherever they wanted just to obtain extra land****** d) It gave away good land that would have been quickly taken by homesteaders

What is the drawback of buying stock on margin?

a) It magnifies the gains of increased in stock prices b) If the stock does poorly, investors have to pay a lower interest rate back to the lender c) It magnifies the losses of downturns in stock prices******** d) If the stock does well, investors have to pay a higher interest rate back to the lender

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

The (re)discovery of New World was driven by countries trying to break whose initial monopoly over the spice trade?

a) Italian City-States****** b) Spain c) England d) France

According to our growth accounting model, which of the following inputs contributed the largest share to U.S. GDP growth from 1940-1990?

a) Labor b) Land c) Capital d) Productivity****

_______ 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) Double coincidence of wants****** c) Fiat currency d) Legal tender

Heckelman and Dougherty (2007) argue that personal characteristics affected politicians' votes on the U.S. Constitution. They find that merchants were more likely to vote for a National system. As discussed in class, what is the most likely cause of this vote:

a) Merchants feared that a powerful central government would lead to the same mercantilist strategies as the British king b) Merchants wanted a more stable government and currency to encourage trade****** c) Merchants wanted interior trade barriers to help raise government revenue d) Merchants wanted to encourage inflation

Which of the following types of competition is most likely to lead to a sustained highest price and lowest quantity produced in the market?

a) Monopoly****** b) Collusion c) Imperfect competition d) Perfect competition

The Economist Article "Earnings Reprieve" highlights that U.S. corporate profits are down on average. The author highlights that this average might be a bit deceiving though. Why is this?

a) Most big tech companies are doing okay, but non-tech companies are doing poorly b) The Chinese tariffs are likely permanent and thus American companies should experience a rebound c) The worldwide decline in production is probably worse in other countries d) The average company is doing okay, but the largest tech companies are dragging down the average*********

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) Most businessmen would not do anything morally ambiguous for high returns b) Competitors typically do not ever talk to each other in order to make such a deal c) Customers are good at immediately finding out about collusion and boycotting products d) Individual firms have a large incentive to undercut the high collusive price and capture the entire market regardless of the deal they made******

There are many possible effects that could be responsible for the recovery from the Great Depression. Romer (1990) calculates what output would have been like (1) without fiscal policy or (2) without monetary policy to determine what factor was most important. She finds that _______?

a) Nearly all the recovery was due to government spending in the New Deal b) The recovery was equally due to the expansion of money supply and government spending c) Neither were responsible for the recovery d) Nearly all the recovery was due to the expansion of money supply due to gold inflows**********

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 learn to become efficient***** c) Young firms often have inexperienced management and thus the government should encourage training by establishing universities d) Young firms often fail and must be protected from bankruptcy using government bailout funds

Examining the location of patenting activity, Perlman (2016) argues that the size of a market increases the number of patents because _______.

a) No patents were created in the U.S. before the arrival of the transcontinental railroads *****b) The arrival of transportation improvements to an area (particularly railroads) greatly increased the number of patents produced c) High population areas did not have much patenting activity compared to rural areas d) Patents were only created around Ivy League schools

In order for an invention to receive a patent, it must have certain properties. Which of the following is not one of those properties?

a) Novel b) Non-obvious c) Useful d) Important**

Why did the South Improvement Company try to use oil refiners as "eveners"?

a) Oil refiners had monopoly power over the industry already b) Oil refiners could allocate the quantity of oil to help maintain collusion among railroads******* c) The South Improvement Company was monitored by the government whereas oil refiners were not d) The South Improvement Company owned the oil refiners already and thus it was easiest to use them

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, 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)

The stock market crashes in October of 1929 often date the start of the Great Depression. However, because ______, the crashes were probably more psychologically damaging than anything.

a) Only the extremely wealthy were invested in the stock market b) Stock prices immediately returned to their pre-crash levels c) J.P. Morgan provided funding for all firms who needed it d) There were no bank or firm failures for almost a year after the crash*********

The Economist article titled "Bully for You" suggested that President Trump's tariff threats have worked because __________?

a) Other countries trade very little with the U.S. b) The U.S. is the most important commercial market in the world****** c) Other countries fear a global recession d) Other countries believe Trump is different from other politicians

The Quantity Theory of Money would argue that which of the following is generally responsible for decreases in prices (i.e., inflation)?

a) Output going down b) Money going down****** c) Velocity going up d) Money going up

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

Why might people want a Bimetallic Standard (as opposed to a fiat 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

Which of the following was not a reason why manufacturing was initially so small in the U.S.?

a) Previous British laws largely prohibited manufacturing in the colonies b) British textile firms were much more efficient and established c) The U.S. set tariffs rather low for most goods d) The U.S. did not have sufficient raw inputs (e.g., iron, coal, etc.) to produce manufacturing goods******

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******

The Economist Article "The Break-Up Conversation" examined the potential for anti-trust cases to be brought against big U.S. technology companies. They highlight that Makan Delrahim at the Department of Justice argued that they cannot just use high prices as a measure of harm to consumers because _____.

a) Prices are becoming less important to today's consumers b) Cryptocurrencies and other digital currency are moving into the market c) Prices often have gone down as a result of technology monopolies**** d) High prices are not one of the listed anti-trust offenses in legislation

Who is generally hurt by protective tariffs and who is generally helped?

a) Protected industries are hurt by tariffs and exporters and consumers are helped b) Exporters and consumers are hurt by tariffs and protected industries are helped**** c) Manufacturers are hurt and farmers are helped d) Governments are hurt and consumers are helped

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 endogeneous way?

a) Railroads were built by the government 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) Railroads only carried people or products not both and thus could travel faster

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) The U.S. government wanted to compete with Canada for land rights in the west c) Farmers needed more because western lands had less water, a harsher climate, and rockier soil****** d) People decided they wanted to be ranchers instead of farmers

In Railroads and American Economic Growth, Fogel finds that railroads had a relatively small positive effect on the economy (i.e., under 5% of GDP). Which of the following is among his evidence for this small figure?

a) Railroads were generally much slower than river travel b) Railroads could only ship manufacturing goods and people not agricultural products c) Railroads were more expensive to use than canals and rivers****** d) Canals encouraged a great deal of iron and steel to be produced

Why do investors use credit default swaps?

a) Reduce the risk of investing in mortgage backed securities********* b) Increase the return of investing in mortgage backed securities when prices were rising c) Obtain liquidity d) Prevent a run on bank

According to the Von Thünen's Featureless Plain Model, what do we expect to occur to the price of land in the city center when a railroad is built out from the city center in one direction?

a) Remain the same******* b) Increase c) Decrease d) There is no other potential answer

White (1990) studies the reasons for stock growth and collapse during the late 1920s. What does he argue was the cause of the rapid growth in the late-1920s?

a) Rise in fundamentals (i.e., higher profits and dividends) b) Women and children started working substantially more c) Anticipation of the Smoot-Hawley Tariff that would be passed d) People (particularly new investors) irrationally over-estimated the market***********

Before 1900, manufacturers were focused on decreasing costs by increasing the quantity produced. However, after 1900, modern manufacturing firms began to focus on increasing their _______ (i.e., the speed of their production).

a) Shop-order system b) Economies of scale c) Throughput****** d) Horizontal integration

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

The Navigation Acts had little effect on the general population of the American colonies. Which of the following was not a reason for the limited reaction?

a) Southern farmers mostly produced crops that were sold throughout the American colonies and not exported by sea****** b) Colonists consumed relatively few imports c) The acts gave additional business to Northeastern merchants and shippers d) The King did not enforce many of his rules

The industry life cycle describes the birth, rise, and decline of industries over time. During which of the steps is the branding of products starting to occur and the product is beginning to be consumed by wide range of individuals?

a) Startup b) Growth*** c) Shakeout d) Maturity

Before the arrival of Ford's Model T, 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

_____is the economic term that people get more efficient doing something the more they do it over time?

a) Street smarts b) Learning by doing**** c) Economies of scope d) Economies of scale

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

What industry was the first to develop modern business management structures and why?

a) Textile factories because they were the first to implement labor-saving devices b) Retail firms because they were the first to market items to many locations through the mail c) Railroads because they operated in a variety of locations and provided a variety of services****** d) Computer companies because they had to create new technology and market it to the world

We typically highlighted that the Quebec Act was the spark that led to the Revolutionary War. Why was it such an important Act?

a) The Act imposed taxes on a large number of individuals that did not have a chance to protest laws b) The Act affected wealthy landowners that decided to fund the Revolutionary War c) The Act affected farmers and lower classes that provided enough soldiers to fight the war****** d) The Act led to the Boston Massacre

Why was the Pennsylvania Mainline Canal not as successful as the Eric Canal?

a) The Appalachian Mountains forced portages/railroads in places where a canal was impossible******* b) People preferred going through New York City because it was a much better port c) The Mainline Canal was built after railroads had already spread across the nation d) The Mainline Canal did not reach all the way across the state and thus did not connect to the Midwestern producers

If the GDP of the American colonies grew nearly 10-fold over the 1700s, but GDP per capital growth was less than 35%, then what must have been occurring?

a) The King took most of the output for the empire b) Population growth was strong over the period due to high fertility and immigration***** c) The nation was mostly agricultural and therefore output gains did not carry over d) Many people died in the colonies as a result of disease and harsh winters

What was the turning point of Britain's hands-off policy towards the colonies?

a) The Navigation Acts of the 1600s b) The End of the French and Indian War in 1763****** c) The Boston Massacre of 1770 d) The Quebec Act of 1774

What was the main difference between the Clayton Anti-Trust Act and the Sherman Anti-Trust Act?

a) The Sherman Act clarified the definitions of "trust" and "monopoly", whereas the Clayton Anti-Trust Act did not b) The Clayton Act was declared constitutional by the Supreme Court whereas the Sherman Anti-Trust Act was declared unconstitutional c) The Clayton Act clarified the definitions of "trust" and "monopoly", whereas the Sherman Anti-Trust Act did not*** d) The Sherman Act was declared constitutional by the Supreme Court whereas the Clayton Anti-Trust Act was declared unconstitutional

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 was never able to receive even a single patent c) The demand for rubber products was low and thus was not profitable *****d) 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

Allen (1991) argues that little homesteading was done in Utah because _______.

a) The Utah population preferred to settle the land slowly in order to keep communities together b) Utah had no good farm or ranch land available that people would want c) The Utah population reached out to help the Indian communities rather than to fight them******* d) The U.S. government wanted to keep land for national parks

How does a country primarily choose where it produces along its production possibilities curve?

a) The amount of people in the country b) The amount of resources (i.e., inputs) a country has c) The likes and dislikes of the country's citizens***** d) The education level of the country

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 Civil War drew away farm workers and thus increased the need for the reaper *****c) The price of wheat in the U.S. rose dramatically due to the Crimean War in Europe d) Slavery became illegal in the Midwest and Great Plains and thus increased the need for the reaper

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 the colonial governments provided for all their needs b) The colonies operated a large trade deficit with Great Britain and 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 regardless of who owned them

Why did Britain primarily allow the American colonies so much initial freedom and encourage development beyond the coastal locations?

a) The colonies produced highly demanded products such as cotton b) Needed a place to encourage trade with the British West Indies c) Harass and challenge the nearby Spanish and French colonies****** d) Thought that they would find gold/silver mines out west

A entire production possibilities curve (and not just a point along the curve) illustrates what?

a) The combinations of products a country can produce using all its resources****** b) The likes and dislikes of the country's citizens c) The country's government budget spending d) The geographic size of a country

Even after the invention of the reaper, many farmers still used a grain cradle due to their cost differences. Which of the following best describes the relative costs of each tool?

a) The cradle had both a high fixed cost and high variable costs compared to the reaper b) The reaper had a high fixed cost and low variable costs compared to the cradle****** c) The reaper had both a high fixed cost and high variable costs compared to the cradle d) The cradle had a high fixed cost and low variable costs compared to the reaper

What was the result of the veto of the Second Bank of the United States and other Jackson financial policies?

a) The development of manufacturing in the U.S. b) The massive public investment in railroads c) The Panics of 1837 and 1839******* d) The passage of the Homestead Act

Which of the following is not a key reason for the development of big businesses in the U.S.?

a) The development of the trust structure****** b) Population growth c) Lowered transportation costs and times d) Development of new industries

Scholars often split the New Deal into two parts. What was the difference between the two?

a) The early period legislation was focused on agricultural issues whereas the later period legislation was focused on banking issues b) The early period legislation was seeking to deal with the Great Depression itself whereas the later period legislation was focused on safety nets and improving standards of living for working class people********* c) The early period legislation was focused on manufacturing issues whereas the later period legislation was focused on agricultural issues d) The early period legislation was focused on safety nets and improving standards of living for working class people whereas the later period legislation was seeking to deal with the Great Depression itself

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*******

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 quickly d) It was the only way the government might be able to sell off land

The U.S. manufacturing system started very slow. Which of the following was the first major step to establishing U.S. manufacturers that could compete with European ones?

a) The government paid for research and development of young firms ****b) Migration of smart people who had "studied" European technology c) The government encouraged high fertility rates in order to increase the supply of workers d) After the Revolutionary War, countries began to freely trade with the U.S.

While free banking ideas were growing for some time, Bodenhorn (2006) argued what event solidified political support and led to the passage of a Free Banking Act in New York?

a) The rise of the Albany Regency after the downfall of Second Bank of the United States b) The rise of Anti-Mason groups after disappearance of William Morgan*********** c) Push by Jacksonian Democrats in response to Jackson's last year in office d) Response to bank failures during the Panic of 1837 and collapse of New York Safety Fund

The Manufacturing Belt is what?

a) The safety belts that manufacturing workers were required to wear when working with machinery b) The transcontinental railroad that ran across the middle of the country allowing manufactured goods to be traded throughout the nation 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) 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

The Economist article titled "A Strangely Elastic Expansion" highlighted ___________ as one fundamental recent change in the structure of the American economy?

a) The shift from restrictions on trade to free trade b) The shift from slow but constant growth to more sporadic but quick growth c) The shift from manufacturing to services and intellectual property rights******* d) The shift from a politically-driven Federal Reserve to one driven only by policy concerns

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 shop-order system b) Continuous process production c) Overtime pay d) The differential piece-rate method******

What event led to the immediate breakout of the Panic of 1907?

a) The start of WWI b) Failed corner on United Copper Company stock by F. Augustus Heinze****** c) The death of J.P. Morgan d) The San Francisco Earthquake of 1906

Why specifically did the First Banking Crisis of the Great Depression begin in 1930?

a) The uncertainty surrounding FDR taking office b) The failure of Caldwell and Company led to closures at connected banks********* c) The stock market crashes of 1929 d) The Reconstruction Finance Corporation gave out the names of banks that borrowed money

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 Safety Fund compared to the Suffolk System b) The Suffolk System was granted power from the state government to supervise banks while the New York Safety Fund was not given that power c) Losses in the Suffolk System were concentrated in a single bank which prompted them to supervise, whereas losses in the Safety Fund were dispersed amongst banks which did not prompt them to supervise*********** d) Banks in New England were relatively safer than banks in New York

Why were colonies helpful under the mercantilism approach?

a) They allowed discontented citizens to be removed from the main country b) They provided resources and outputs that the main country did not****** c) They allowed slaves to be used for production unlike the main country d) They led to a more peaceful world economy

How did credit ratings agencies play a role in the build up to the Great Recession?

a) They bought too many bad MBS bonds******* b) They issued their own MBS bonds in order to take advantage of the market boom c) They turned in multiple investment firms for inaccurate information d) They helped firms build the worst top rated MBS bonds possible

The First and Second Banks of the United States reportedly slowed down growth of speculative credit and helped maintain stability in the financial system. How did they achieve this?

a) They were given supervisory power over all state banks b) They used their branches to threaten other banks with redemption of their notes******* c) They established a deposit insurance fund to prevent depositors from losing money d) They had the ability to change the value of gold to silver at the Treasury

How is total profit calculated?

a) Total revenue b) Total revenue minus total costs***** c) Total revenue minus average total costs d) Total revenue minus variable costs

What are the dates and times of the professor's normal office hours?

a) Tuesday 1:30-2:30pm and Thursday 3:00-4:00pm****** b) Wednesday 3:00-4:00pm and Friday 1:20-2:30pm c) Friday 3:00-4pm and Saturday 1:30-2:30pm d) Monday 1:30-2:30pm and Wednesday 3:00-4:00pm

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

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) Wabash, St. Louis, and Pacific Railroad v. Illinois****** b) Munn v. Illinois c) M. Pennybags v. Illinois d) Short-Line Railroad v. New York

What are interlocking directorships?

a) When companies purchase some of each other's stocks b) When different companies are run by the same set of executives***** c) When deals are made for one company but not another d) When different companies are all fully owned by a single parent company

Which best describes the reason for the high failure rate of free banks relative to other banks?

a) Wildcat banking b) Collapse of state bond prices******** c) Panics of 1837, 1839, and 1857 d) Lack of branching

A trademark is an:

a) 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 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 word, name, or symbol that indicates the source of the goods and to distinguish them from the goods of others

Part of the effect of the railroad on the country's growth was through _____ which denotes its effect on producers of key railroad inputs such as iron, steel, and railroad equipment.

a) forward linkages b) backwards linkages***** c) horizontal integration d) vertical integration

Which of the following acts switched the U.S. from a "first to invent" system to a "first to file system"?

a)Leahy-Smith America Invents Act (AIA)***** b)Patent Act of 1790 c) Patent Act of 1952 d)Patent Cooperation Treaty of 1970

When transportation costs fall in a world without international trade, we often say that the transportation "wedge" gets smaller. Why is this the case?

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

Acemoglu, Johnson, and Robinson (2001) and Engerman and Sokoloff (2002) agree that the North American colonies were likely to establish good institutions relative to other British colonies, but their reasons differ. Which of the following best explains the reasons for their positions?

d) Acemoglu, Johnson, and Robinson argue that European settlers were better able to survive the American conditions, whereas Engerman and Sokoloff argue that the American colonies had more equality because they did not have indigenous labor or ability to produce cash crops on plantation

Jefferson and Hamilton represented the respective sides of the nation's early debate on land policy. Which of the following is a correct depiction of their competing views:

d) Jefferson wanted land to be sold very cheaply in order to encourage democracy, while Hamilton wanted land to be very expensive in order to encourage non-agricultural industries