Richard Easterlin (1968, 1987) maintains that the 20th century’s pattern of births was (a) affected primarily by Real Gross National Product (Real GNP). (b) negatively affected by the U.S. population’s materialistic desires and positively affected by its income. (c) explained by waves of discrimination. (d) explained solely by the wars. ANSWER (b)
The classical and Monetarist models agree that a. the use of fiscal policy can stabilize output. b. money demand is inherently unstable. c. the public has perfect information about the price level. d. increases in the money supply are the primary cause of inflation. e. none of the above ANSWER D
Once wartime spending is under way and production is diverted away from household consumption items and private investment goods, (a) real Gross National Product will likely fall. (b) the money supply will automatically increase. (c) inflation will likely rear its ugly head if productivity does not advance. (d) production and employment will fall. ANSWER […]
At the beginning of the twenty-first century, (a) many people returned to living in the Northeast and Midwest. (b) the majority of U.S. citizens lived in rural areas. (c) the majority of people resided in the South and West. (d) all of the above ANSWER (c)
An inflation-induced increase in the effective tax rate on interest income and capital gains results in a. a leftward shift of the saving schedule. b. a rightward shift of the saving schedule. c. no shift of the saving schedule. d. a rightward shift of the investment schedule. ANSWER A
The Civil War (1861–1865) was the root of which modern-day belief(s)? (a) The Thirteenth Amendment of the Constitution, which prohibits slavery and involuntary servitude in the U.S. (b) The belief that wars can stimulate industrialization. (c) The belief that wars can effectively mobilize resources, boost employment and heighten production without inflationary consequences. (d) All of […]
The Fourteenth Amendment was applied to the railroads in the Santa Clara County v Southern Pacific Railroad (1886) decision even though the original intent of that amendment had been to protect the property of former slaves. Indicate whether the statement is true or false ANSWER TRUE
Which of the following statements is(are) correct a. As a result of the Great Depression of the 1930s, the quantity theory had come into disrepute, together with the rest of the classical theories. b. According to Friedman, the depression was caused by a fall in aggregate supply and not aggregate demand as believed by the […]
The monetarists would expect a tax cut to have a strong effect on output only if the spending increase was a. financed by a sale of bonds. b. financed by a cut in government spending. c. financed by an increase in the money stock. d. accompanied by a reduction in the deficit. ANSWER C
In 1994, the Republicans’ “Contract with America” encompassed economic provisions that drew upon the ideas of a. Keynesian economists. b. monetarists. c. new classical economists. d. supply-side economists. ANSWER D
