The fall in the money multiplier and money supply during the Great Depression
a. suggests that the public but not banks can be a major participant in the money supply process.
b. implies that banks but not the public can be a major participant in the money supply process.
c. means that neither the banks nor the public were involved in the money supply process.
d. illustrates that both the public and banks can be major players in the money supply process.
Question 2Which of the following is not a valid criticism of Fogel's (1964) methodology in his study of railroads?
(a) The canal prices used for 1890 were low.
(b) The impact of railroads on financial markets is ignored.
(c) The nonpecuniary gains from using railroads could have been considered.
(d) The amount of land cultivated would have been reduced.
Question 3With the invention of ATM machines, the public now holds less currency. As a result, we would expect to have seen
a. both the M1 and the M2 multipliers to increase over time.
b. the M1 multiplier to increase while the M2 multiplier to decrease over time.
c. the M1 multiplier to decrease while the M2 multiplier to increase over time.
d. None of the above
Question 4Which transportation industry did government invest most heavily in before 1860?
(a) Turnpikes
(b) Canals
(c) River steamboats
(d) Railroads
Question 5Up until the early 1880s, there was no federal control over private activities.
Indicate whether the statement is true or false
Question 6Contrary to many researchers' views, Hurst (1969) claims the government needed private investors to fund internal improvements.
Indicate whether the statement is true or false
Question 7As a result of the case of Dartmouth College v Woodward (1819), the Federal Trade Commission was formed years later in 1914.
Indicate whether the statement is true or false
Question 8Railroads attracted funds from foreign investors.
Indicate whether the statement is true or false
Question 9If many banks fail, this is likely to cause a/an
a. increase in the currency-to-deposit ratio.
b. increase in the reserves-to-deposit ratio.
c. a fall in the currency-to-deposit and reserves-to-deposit ratios.
d. both a and b.
e. none of the above.
Question 10Albro Martin (1971) argues that the Interstate Commerce Commission (18871995) was captured by its customers, not the railroad industrialists.
Other researchers like Gabriel Kolko (1965) highlight the involvement of railroad industrialists in capturing this government agency to serve a cartel role, too. Indicate whether the statement is true or false
Question 11Primary liabilities of the Federal Reserve include
a. Federal Reserve notes.
b. U.S. government securities.
c. loans to banks.
d. reserve deposits by banks.
e. Both a and d
Question 12Primary assets held by the Federal Reserve are
a. loans to commercial banks.
b. U.S. government securities.
c. Federal Reserve notes.
d. reserve deposits by banks.
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