One way to characterize technological change is “creative destruction,” which basically means that today’s innovation will productively destroy yesterday’s capital investment. This destruction creates new job opportunities, boosts production and offers a greater variety or more goods and services than in the past. Indicate whether the statement is true or false ANSWER TRUE
The Charles River Bridge v. Warren Bridge (1837) decision established that a state could incorporate competing franchises, effectively overturning the old idea that a corporate charter implied a grant of monopoly. Indicate whether the statement is true or false ANSWER TRUE
Dollarization by a foreign country is another form of: a. balancing a country’s current account. b. maintaining monetary policy independence. c. fixing an exchange rate. d. maintaining a balanced government budget. ANSWER C
The New Deal in U.S. history is that period during the Great Depression in which American “capitalism” is redefined and the role of the federal government in the economy fundamentally changes forever. Indicate whether the statement is true or false ANSWER TRUE
The National Industrial Recovery Act of 1933 increased competition among firms. Indicate whether the statement is true or false ANSWER FALSE
In the Mundell-Fleming model, all of the following are true EXCEPT: a. the intersection of the IS and LM curves determine the equilibrium exchange rate. b. the BP curves position is determined by the exchange rate. c. the policy choice between fixed and floating exchange rates shifts the BP curve. d. the extent of capital […]
From 1860 to 1910, international net capital flow into the U.S. (a) was positive when the U.S. economy expanded. (b) was neutral and not influenced by the U.S. business cycle. (c) was negative when the U.S. economy grew. (d) was positively impacted by U.S. discussions about and actual restrictions on immigration. ANSWER (a)
The federal government incentive to support special-interest groups (steel, auto, drug, environment) at the expense of unorganized, widely dispersed groups (for example, taxpayers or consumers) occurs (a) only when the benefits that accrue to the special-interest group exceed the costs imposed on others. (b) when nonspecial-interest voters are unconcerned or uninformed about the issue, and […]
The research of Ben Bernanke (1983) found the banking system of the 1930s to be fundamentally flawed and unable to serve its function of financial intermediation. Federal help was needed. Indicate whether the statement is true or false ANSWER TRUE
Which of the following provides a tool by which you can measure overall price changes paid by representative individuals living in urban households? (a) The GDP Deflator ( NGDP/RGDP 100, expressed as a percentage ) (b) The Producer Price Index (c) The Consumer Price Index (d) The Housing Price Index ANSWER d
