Which 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 […]
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 […]
The organized groups of people who favor government intervention do so at the expense of other groups because even government resources are limited. Indicate whether the statement is true or false ANSWER TRUE
Which of the following statements is supported by the research of economic historians? (a) Canals and railroads were built with a mixture of private and public enterprise and financing. (b) Canals and railroads were built largely without U.S. government participation. (c) Canals were built with public assistance, but railroads were built with almost no government […]
“Lender of last resort” means that the central bank a. has to lend money to failing banks. b. should lend money to individuals if their bankruptcy would threaten the banking system. c. should lend money to banks that are suffering short-term liquidity shortages. d. should lend money to pay for government deficits. e. None of […]
The benefits of urbanization include: crime, pollution, increased taxation and congestion. Indicate whether the statement is true or false ANSWER FALSE
Primary 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. ANSWER B
The Webb-Pomerene Act of 1918 prohibits price fixing and other anticompetitive agreements that pertain solely to goods for export. Indicate whether the statement is true or false ANSWER TRUE
Primary 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 ANSWER E
Assume the Federal Reserve increases the required reserve ratio from 10 to 20 percent and reserves are $80 billion. Then the change in the money supply will be a. $80 billion. b. $20 billion. c. $400 billion. d. $800 billion. e. none of the above ANSWER C
