During the postbellum period of U.S. history, (a) the U.S. balance of payments experienced a deficit throughout the entire period. (b) manufacturing exports became the top foreign exchange earner. (c) cotton exports continued to be the top foreign exchange earner. (d) the U.S. never borrowed from foreigners. ANSWER (c)
According to Ricardian equivalence, the key consequence of an increase in the budget deficit that arises from a tax cut is ________. A) a decrease in private investment B) an increase in inflation C) an increase in the public’s holding of government bonds D) an increase in the supply of money ANSWER C
Most towns were initially established at locations with (a) an excellent harbor and river stretching into the hinterland. (b) an excellent harbor and flat land so roads could be easily built into the hinterlands. (c) in mountainous areas which provided better protection against Indians. (d) extensive forests to provide fuel and lumber. ANSWER (a)
Tax policies involving increases in taxes paid by the private sector (a) are generally tolerated when incomes are rising faster than taxes. (b) are always opposed by the private sector. (c) are death to politicians concerned about re-election. (d) are progressive when the lowest income bracket pays the highest percentage of total income. ANSWER […]
Which of the following are the most frequently utilized tools of fiscal policy in the United States? a. Indirect business taxes b. Corporate income taxes c. Inheritance taxes d. Personal income taxes ANSWER D
Which of the following models explains why high unemployment has persisted in some European countries for such long periods—periods too long to be the result of fixed money-wage contracts or backward-looking price expectations? a. Insider outsider models b. Efficiency wage models c. Sticky price models d. IS-LM models ANSWER A
The number of private state banks decreased after the First Bank of the United States lost its charter. Indicate whether the statement is true or false ANSWER FALSE
What do Baack and Ray (1983) find in their survey of U.S. tariff history? (a) Tariff rates in the U.S. were low. (b) Tariff cuts were associated with the fast-growing industries. (c) The highest tariff rates in the U.S. were associated with the fastest growing industries. (d) The U.S. was a world leader in free […]
According to Ricardian equivalence, a long-run impact on the economy occurs when the government ________. A) lowers taxes B) issues more government bonds C) increases spending on capital goods D) raises taxes ANSWER C
The highest rate of U.S. growth was recorded in which of the following periods? A) 1948-73 B) 1967-83 C) 1974-95 D) 1996-2008 ANSWER A
