From the Civil War until 1914, what change(s) occurred in U.S. policies regarding tariffs? (a) Tariff rates were generally higher and customs receipts were higher than before the Civil War. (b) As the momentum of the westward movement increased, increased revenues from land sales allowed Congress to return tariff rates to their pre-Civil War levels. […]
Capital and labor are distinct from productivity in that ________. A) productivity is independent of technology changes B) productivity can only increase over time C) productivity is subject to diminishing returns D) capital and labor are subject to diminishing marginal returns ANSWER D
In the long-run, the inflation rate will move very closely with ________. A) the growth rate of the money supply B) the change in government debt C) the growth rate of government expenditures D) changes in tax rates ANSWER A
New England possessed a comparative advantage in producing cotton. Producers in this region produced cotton at the lowest possible opportunity cost in colonial America. Indicate whether the statement is true or false ANSWER FALSE
During World War II (1941–45), Golden (1990) argues, the opportunity cost of women staying at home (a) decreased. (b) stayed the same. (c) increased. (d) cannot be measured. ANSWER (c)
Which of the following is the most difficult to measure? Changes in ________. A) the size of the labor force B) population C) the quantity of labor D) productivity ANSWER D
Advocates of the public-choice view argue that voting behavior is influenced by the a. rate of inflation prior to an election. b. level of economic activity. c. “favorite son” syndrome. d. campaign issues. ANSWER B
The difference between savings and investment is that a. investment is purchasing stock, while savings is putting money in a bank. b. investment is purchasing capital, savings is postponing consumption. c. investment is purchasing assets, while consumption is purchasing goods. d. investment increases output, while savings decreases output. Figure 4.1 ANSWER B
What does international voluntary trade do? (a) Exploits small countries (b) Benefits all trading partners (c) Places labor unions at an unfair disadvantage (d) Forces productive domestic firms to close their doors ANSWER (b)
Private profits provided colonial producers with incentive to direct the use of their regional resources in those fashions that produced the highest yield in world markets. Indicate whether the statement is true or false ANSWER TRUE
