According to Kuznets (1954), competition will (a) unfairly destroy leading industries and impede overall economic growth across industries. (b) require government intervention. (c) push efficient industries into leadership roles and pull the backward and forward industrial links to these leaders with them. (d) contract consumer market opportunities. ANSWER (c)
According to the early Keynesians, a. the money demand function was unstable; the interest elasticity of money demand was extremely high; and, as a consequence, changes in the quantity of money did not have important predictable effects on the level of economic activity. b. the money demand function was stable; the interest elasticity of money […]
According to the neoclassical growth model, economic growth occurs because of a. increasing returns to scale. b. exogenous increases in technology. c. international trade that can increase knowledge. d. government policy which encourages savings. e. all of the above. ANSWER E
The American Revolution and Constitution represented the transition to “modern liberalism,” or (a) a strong emphasis on the role of government in providing for the welfare of the people and the regulation of business activities. (b) an emphasis on free enterprise and competitive individualism and a limited role for government. (c) an emphasis on public […]
In answer to the question, “Could they see the Great Depression coming?”, Hughes and Cain (2011) respond: (a) No—Many people firmly believed that markets would self-correct and eventually recover with no government intervention (b) No—many people seemed to believe that the prosperity of the 1920s would continue indefinitely because they believed that the economy was […]
In a floating exchange rate system, an appreciation of the exchange rate could be caused by a. a cut in taxes. b. a decrease in government spending. c. an increase in the domestic money supply. d. a decrease in the foreign demand for U.S. goods. ANSWER A
During the post-bellum period, growth in demand outpaced growth in supply, causing food prices to fall. Indicate whether the statement is true or false ANSWER FALSE
Chandler (1994) credits IBM’s dominance in the world computer market to (a) advancements in technology. (b) investments in research and development. (c) solid management and sophisticated marketing. (d) all of the above. ANSWER (d)
In the monetarist model, an increase in both government spending and taxes would a. lead to a large increase in interest rates. b. increase income dollar for dollar with the increase in government spending. c. have a much smaller impact on income than in the Keynesian model. d. all of the above. ANSWER C
The decade of the 1920s was characterized by which of the following? (a) Economic advancements in agriculture (b) A decrease in the inequality of income and wealth (c) Consumers dramatically shifted their household demands into purchases of durable goods on credit (d) All of the above characterized the decade of the 1920s ANSWER (c)
