In a system of perfectly flexible exchange rates, an expansionary U.S. monetary policy will cause
a. a rise in the value of the dollar relative to foreign currencies.
b. a fall in the value of the dollar relative to foreign currencies.
c. no change in the value of the dollar relative to foreign currencies.
d. a change in the value of the dollar relative to foreign currencies but the direction of the change is uncertain.
Question 2North (1974) finds evidence to suggest that the iron industry was equally dependent on the railroad and iron stove industries for sales revenue at one point in time.
Indicate whether the statement is true or false
Question 3Which of the following is not a possible source of instability in velocity in the Monetarist model?
a. financial innovation.
b. changes in monetary policy
c. changes in interest rates
d. credit cards.
Question 4The supply-side economists expect that a cut in the marginal income tax rate, with lost revenues made up by a cut in government spending, would
a. increase output.
b. decrease output.
c. leave output unchanged.
d. affect output but the direction of the effect is uncertain.
Question 5One explanation for the fall in the value of the U.S. dollar since 2001is
a. the mix of an tight fiscal/tight monetary policy over the period.
b. the relative weakness of the U.S. economy over the period.
c. a higher degree of accommodation of supply shocks in the United States relative to our trading partners.
d. the disintegration of the Bretton Woods system during these years.
Question 6Some researchers argue that the American Revolution was probably inevitable. The most important factor, of those listed below, was/were
(a) prohibitions against trade with nations other than England and severe exploitation of the colonists under the Navigation Acts, which kept the standard of living low in the colonies.
(b) excessive taxation which for generations kept the after-tax incomes of the colonists below those in England.
(c) a series of revenue-raising measures imposed on the colonists at the end of the French and Indian War for the purpose of making the colonies more self-supporting.
(d) British prohibitions against the use of slaves in the lands west of the original thirteen colonies.
Question 7Which of the following occurred during the 20th century?
(a) The total U.S. population increased.
(b) The percentage of foreign-born residents decreased, on average.
(c) The median age fell.
(d) All of the above occurred during the 20th century.
Question 8The command economy of World War I (191418) possessed which of the following traits?
(a) Decentralized decision-making in the markets
(b) The creation of many state agencies
(c) Volunteers for the armed forces
(d) Centralized decision making by bureaucrats
Question 9Supply-side economists argue that taxing of nominal gains and interest earnings during inflationary periods
a. results in an increased effective tax rate on real returns but will not retard saving.
b. will retard saving but will not increase the effective tax rate on real returns.
c. will increase the effective tax rate on real returns and will retard saving.
d. None of the above
Question 10U.S. demand for tertiary labor increases when
(a) the wage rate rises.
(b) urbanization proceeds.
(c) demand for goods and services decreases.
(d) price of output declines.
Question 11Which of the following revenue-raising options did the colonial government select to secure the resources needed to revolt?
(a) Printing money and borrowing from other countries
(b) Printing money and confiscating property
(c) Taxing and borrowing from other countries
(d) Taxing and reducing non-military government spending
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