Why did railroads come under government regulation?
(a) Disgruntled shippers and travelers raised an outcry about the routes of railroads.
(b) Some people effectively argued that railroads were charging unfair rates.
(c) The railroad industry was too competitive, thus driving rates below those necessary
to ensure normal profits for railroad companies.
(d) All of the above are correct.
Question 2Early Keynesians concluded that the quantity of money was not important because they assumed
a. low interest elasticity of money demand and high interest elasticity of the demand for output.
b. high interest elasticity of money demand and low interest elasticity of the demand for output.
c. high interest elasticity of money demand and high interest elasticity of the demand for output.
d. both low interest elasticity of money demand and of the demand for output.
Question 3The monopoly issue is concerned with the fact that
(a) monopolies will charge what the traffic will bear in order to maximize their profits.
(b) monopolies will attempt to increase their profits by discriminating among their customers
and charge prices that they are willing to pay, instead of charging one price.
(c) monopolies will be able to charge higher prices and earn higher rates of return than
competitive firms.
(d) all of the above apply.
Question 4Regarding the stock market crash of 1929, evidence shows that
(a) no one expected trouble in the stock market before the October 1929 crash.
(b) there was doubt about the speculative heights of stock prices as they continued to
rise and more money continued to pour into the market.
(c) only active support by the New York Federal Reserve Bank during the summer and
fall of 1929 enabled the bull market to last until October.
(d) investment trusts and nonbanking money sources correctly anticipated the downturn.
Question 5Under a fixed exchange rate system, the central bank must
a. have an unlimited supply of domestic currency.
b. have a very large supply of foreign assets.
c. follow a constant money growth rule.
d. allow the money supply to adjust to keep interest rates and exchange rates unchanged.
Question 6Which of the following factors are important in the determination of growth rates of output in the intermediate run?
a. Variations in the rates of capital formation.
b. Changes in population growth.
c. Changes in money growth.
d. All of the above.
e. None of the above.
Question 7One thing that Keynesians and Monetarists agree about is
a. the shape of the money demand function.
b. that business cycles are primarily driven by changes in aggregate demand.
c. the use of monetary and fiscal policy in stabilizing output.
d. that the public forms their expectations primarily by looking backwards.
e. both b and d.
Question 8The object of the Northwest Ordinances of 1785 and 1787 was to preserve the public domain from private exploitation.
Indicate whether the statement is true or false
Question 9The evidence of building costs in the 1920s shows that the decline in total construction after 1926
(a) reflected the sharp increase in costs as the boom gathered strength.
(b) occurred when building costs remained stable.
(c) occurred in the presence of sharply falling costs that anticipated the 1929 crash.
(d) was a result of the contractionary monetary policies of the Fed.
Question 10A slowdown in labor productivity causes a slowdown in economic growth when all else is held constant.
Indicate whether the statement is true or false
Question 11Total credits in the balance of payments accounts are equal to the
a. supply of foreign exchange.
b. demand for dollars.
c. demand for foreign exchange.
d. supply of dollars.
e. Either a or b
Question 12In the Monetarist model,
a. monetary policy and not fiscal policy is the prime factor in aggregate demand movements.
b. money demand is more volatile than in the Keynesian model.
c. expectations are correct on average.
d. aggregate supply is not the primary source of business cycles.
e. both a and b.
Question 13Federal land policy of the United States was much less generous toward squatters than some of the colonial government's land policies before Independence.
Indicate whether the statement is true or false
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