Economics 1740 - Weber State University



Economics 1740 VERSION A - MARK ON YOUR SCANTRON ANSWER SHEET

Fall, 2002

Dr. Alston , Quiz #11, Walton and Rockoff, Chapters 21& 22

1. The best description of the economic ideology during World War I was.

a. The belief that the economy could be strengthened by centralized coordination.

b. The economy would work best with a strong commitment to the free market.

c. The United States should eliminate many federal agencies during World War I to make the government more efficient.

2. What most accurately describes what happened to earnings in the United States between 1914 and 1920?

a. Both nominal and real earnings increased substantially.

b. Nominal and real earnings dropped significantly as World War I triggered a recession.

c. Nominal earnings increased slightly, but real wages decreased because of the large inflation.

d. A period of deflation led real earnings to increase even though nominal earnings had decreased slightly.

3. Robert Higgs argued that which of the following best explained the growth of “Leviathan” (Big Government)?

a. crises changed fundamental ideologies

b. urbanization

c. the decline in organized religion as a provider of aid and relief for the poor

d. expansion of the right to vote

4. The War Industries Board, headed by Bernard Baruch, performed all of the following functions except

a. negotiating prices of key industrial products.

b. developing and implementing the bulkline pricing system to determine industrial prices that maximized output.

c. establishing a ratings system for government contracts.

d. establishing and enforcing minimum wages for manufacturing workers.

5. What best describes the impact of a price ceiling in a competitive market?

a. This benefits all consumers because they are able to obtain the good for a lower price.

b. The quantity supplied will be in excess of the quantity demanded.

c. It will likely lead to consumers waiting in line for longer periods of time to buy the good.

d. It will benefit both consumers and producers of the good.

6. What best describes the reason for the large migration of African-Americans from the south to the north during the 1920s?

a. This movement was just a continuation of the same trend that had been occurring in large scale since the end of the Civil War.

b. African-Americans moved north to reunite families that had been divided during the many years of slavery.

c. The African-Americans who had worked in the South had mostly been employed in the manufacturing sector, which suffered a downturn in the 1920s.

d. Employers in the North who had traditionally hired many immigrants had to search elsewhere when immigration restrictions were imposed.

7. Which of the following is not accurate about the 1920s?

a. There was a significant increase in mass production and mass marketing.

b. There was a significant increase in urbanization.

c. The ability of many Americans to afford consumer goods dropped sharply.

d. Consumer credit policies were developed and instituted on a large scale for the first time.

8. Which of the following is most accurate about the economic conditions in the 1920s?

a. The large increases in demand for products generated significant cyclical unemployment.

b. There was a significant decrease in the number of hours worked per week.

c. Agriculture was the leading growth sector of the economy.

d. The net migration pattern was from urban to rural.

9. Which of the following best describes trends in unionization and immigration in the 1920s?

a. Both decreased.

b. Both increased.

c. The number of new immigrants increased while the number of union members decreased.

d. The number of new immigrants decreased while the number of union members increased.

10. What most accurately describes Albert B. Fall’s plan to lease the Teapot Dome Oil Reserve?

a. He leased it to a large number of competing firms, which was a good idea because it maximized the rate of oil production.

b. He leased it to a large number of competing firms, which was a bad idea because it led to an excessively high rate of oil production in the short run.

c. He leased it to a single firm, which was a good idea because that firm would have an incentive to take long-run costs into consideration when deciding its rate of production.

d. He leased it to a single firm, which was a bad idea because it would not pay the government the fair market value for the lease.

ANSWERS: Quiz No. 11, Econ 1740 Fall, 2002, Walton and Rockoff, Chapters 21 & 22, Version A

1. ANSWER: a. The belief that the economy could be strengthened by centralized coordination.

2. ANSWER: a. Both nominal and real earnings increased substantially.

3. ANSWER: a. crises that changed fundamental ideologies

4. ANSWER: d. establishing and enforcing minimum wages for manufacturing workers.

5. ANSWER: c. It will likely lead to consumers waiting in line for longer periods of time to buy the good.

6. ANSWER: d. Employers in the North who had traditionally hired many immigrants had to search elsewhere when immigration restrictions were imposed.

7. ANSWER: c. The ability of many Americans to afford consumer goods dropped sharply.

8. ANSWER: b. There was a significant decrease in the number of hours worked per week.

9. ANSWER: a. Both decreased.

10. ANSWER: c. He leased it to a single firm, which was a good idea because that firm would have an incentive to take long-run costs into consideration when deciding its rate of production.

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