AI Economic History of the U S
AI Economic History of the U S ECON 1740
Weber State University
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Date Created: 10/28/15
Chapter 13 The Entrenchment of Slavery and Regional Con ict GENERAL QUESTIONS 1 N U 4 Which region in the New World received the largest share of slaves brought to the New World a b c d Brazil Colonial America Cuba Canada Approxilnately how many slaves were brought to the colonial United States from Africa during the operation of the transatlantic slave trade a b c d 50000 700000 5 million 10 million Approxilnately how many slaves were brought from Africa to the New World during the operation of the transatlantic slave trade a 50 000 b c d I 700000 5 million 10 million The colonial United States accounted for approxilnately what share of the transatlantic slave trade mgnw m 5 percent 25 percent 50 percent 75 percent 95 percent The majority of slaves that were brought to the New World during the colonial period were used in the production of a b C cotton sugar tobacco 0 1 00 3 d rice By 1825 what area in the New World had the greatest portion of slaves a Spanish colonies b the West Indies c the United States d Brazil With the adoption of the US Constitution in 1787 importation of slaves a was made illegal b was allowed but only for the next 20 years c from the Caribbean was prohibited but importation of African slaves was allowed d was allowed only on federally approved vessels that met minimum crew sizes New Jersey adopted a policy of gradual emancipation that freed male slaves when they reached age 25 This policy meant that slave owners earned a rate of return a of zero because profits during the slave s working years about equaled the costs of rearing a slave b that was about equal to the normal return because the profits earned up to age 25 exceeded rearing costs by a substantial margin c a very high rate of return because slaves were generally unproductive after their peak years d that cannot be calculated because of a lack of data Legally speaking the geographic concentration of slavery in the southern part of the United States is explained by all of the following except provisions in the Northwest Land Ordinance of 1787 provisions in the constitutions of some northern states laws allowing for gradual emancipation in some northern states aware an amendment to the US Constitution that allowed importation of slaves only through the port of Charleston after 1800 10 What is not correct about the northern US abolitionist movement a Northern slaveholders could sell their slaves to the south b Slave owners in the North suffered significant economic loss because slaves were given their freedom much sooner than in the South Most Northern states freed slaves after they had reached a minimum age In most northern states freedom was granted over a gradual period of time an 11 By 1850 the single largest US commodity export terms of value was a b c d iron railroad tracks wheat cotton slaves 12 Current research on the productivity of Southern cotton plantations shows 4 g H 01 a that a output per unit of input was greater on large slave plantations than on small free family farms b the majority of the South s cotton crop was grown on farm units of less than 100 acres c output per slave declined during the antebellum period d plantation style agriculture was inefficient e all of the above Productivity gains on southern cotton plantations were primarily due to the a fact that slaves worked longer hours than free workers b fact that slaves tended to work 7 days per week while free workers tended to work 5 or 6 days c use of the gang system d increased use of capital farm machinery on plantations e all of the above According to Walton and Rockoff large slave plantations were efficient than farms without slaves because among several reasons a more the great intensity per hour with which slaves were forced to worked b more large plantation owners used political power to control the best lan c less free men work harder than slaves d less slaves frequently sabotaged production According to estimates by Richard Vedder rates of exploitation for slaves a are similar to those of antebellum manufacturing workers b indicate that slaves received nearly the full value marginal product of their labor c equaled 50 to 65 percent of their value marginal product d cannot be determined due to inadequate data on maintenance costs of adult slaves Most current economic historians believe that slavery was profitable and viable b c slavery was economically inefficient d free labor was more productive than slave labor slavery would have eventually ended due to its inherent unprofitability 17 In the 20 years before the Civil War real per capita incomes were 7 in the H 00 N O N H 22 South than in the North and the growth rate was 7 in the South than in the North a higher higher b lower higher c higher lower d lower lower Which statement is most accurate about the United States between 1840 1860 a The per capita income of free people in the Southwest was about twice the national average b The per capita income of free people in the entire United States decreased c The per capita income of free people in the entire United States increased but increased more slowly than it did before the Revolution d The Northwest was the poorest part of the nation as measured by per capita income of free people In examining incomes of free Southerners prior to the Civil War Walton and Rockoff conclude that compared with northerners free Southerners were a generally far poorer than northerners and falling further behind b generally far poorer than northerners except in the old South c generally doing fairly well even in the old South d far richer than northerners but a downward trend was noticeable In 1860 the total value of US slaves was a greater than GNP b about 3 billion c greater than 10 billion d about 1 billion In the Dred Scott decision 1857 the Supreme Court declared that a Congress could not admit a free state without simultaneously admitting a slave state b slavery was not legal in the western territories c fugitive slaves were not legally protected from bounty hunters d Congress could not prohibit slavery in the western territories Which statement is most accurate about the United States between 1800 1860 New states were always permitted to choose whether they wanted to be free or slave states Slaves were prohibited from the western territories and new states The threat of having their jobs replaced by slaves led many southerners to unionize The total value of slaves in the United States increased substantially after the slave trade was stopped in the early 1800s 23 Which of the following statements about the slave family in the United States is most accurate a Slave owners preferred slaves who lived in intact families b In most two parent slave families the parents lived on different plantations c The father was white in about 75 percent of the households headed by single slave mothers d About half of children under 15 years of age were sold away from their families ECONOMIC INSIGHTS 1 Between 1850 and 1860 the prices of slaves 7 and the price of cotton 7 a rose rose b rose fell c fell rose d fell fell 2 Ulrich B Phillips39s proxy for the profitability of slavery was the ratio of a cotton prices to slave prices b cotton prices to maintenance costs of slaves c d e rental cost of slaves to slave prices price of agricultural goods to price of manufacturing goods the interest rate to maintenance cost of slaves 3 Which of the following was a major omission from Ulrich B Phillip s proxy for the rate of return in slavery a the price of cotton b the price of slaves c d e the rate of interest the productivity of slaves the maintenance cost of slaves 4 The text compares two studies on the profitability of slavery one by Phillips and the other by Conrad and Meyer The main reason for the difference in their results is a Phillips failed to account for the effect of rising marginal product on profitability b Conrad and Meyer had better data on slave prices Conrad and Meyer used data from both northern and southern farms Phillips assumed that cotton prices were falling during the antebellum period an Return to Pennnmim 1740 Practice Exam Page Chapter 12 Money and Banking in the Developing Economy GENERAL QUESTIONS 1 Thomas Jefferson argued that the United States should adopt the Spanish dollar as the official unit of account because N U 4 a b c d so many colonists came from Spanish speaking nations it was based on the decilnal system it was less prone to in ation than other units of account it was the unit of account used in most European countries Under the birnettalic standard of the 19th century a the amount of money in circulation increased the American dollar served poorly as a unit of account c d 9 arm a b C d only one metal tended to circulate as money at any given time the government earned profits by selling gold The Coinage Act of 1792 designated both gold and silver as the monetary standard for the United States gold as the monetary standard for the United States silver as the monetary standard for the United States paper Treasury notes as the monetary standard for the United States According to Gresham s Law in ation and unemployment are inversely related tax rates and tax revenues are inversely related bad money drives out good money in ation is inevitable in the long run All of the following means were used to reduce problems associated with the circulation of commercial bank notes except a pledge by the Treasury to accept all bank notes issued by state chartered banks anti counterfeiting associations formed by commercial banks bank note reporters and counterfeit detectors such as Thompson39s Reporter and Hodges39 Bank Note Safeguard note brokers who bought and sold commercial bank notes Which of the following was not true of the First and Second Banks of the United States They had branches throughout the country They issued paper money They made loans to private individuals They set the bimetallic ratio Opponents of the First Bank of the United States argued that the bank was unconstitutional created a money monopolyquot 5 a b c d 6 a b c d 7 a c d e 8 favored northern manufacturing more than southern agriculture opened the US monetary system to foreign control all of the above According to Walton and Rockoff Wall Street bankers opposed the Second Bank of the United States Their opposition was based on the idea that the Second Bank a lent too freely to the federal government b followed a monetary policy that favored stable prices even at the cost of a slower growing economy c followed a monetary policy that kept interest rates too high d favored Philadelphia because that was where the head office of the bank was located 9 What was not one of the primary reasons why people opposed the First and Second Banks of the United States a b C d They printed too much money and triggered a substantial in ation They had monopoly control over some banking activities They were unconstitutional They did not provide sufficiently generous lending policies 10 Which of the following antebellum institutions acted most like a central bank a b the First Bank of the United States the Second Bank of the United States c banks created by the National Bank Act d the US Treasury 11 The Second Bank of the United States rose to prominence under the H H H H 4 leadership of a Alexander Hamilton b Andrew Jackson c Henry Clay d Nicholas Biddle In the mid 1830s the United States entered an in ationary period that culminated in the depression of 1839 1843 Contemporary economic historians attribute this economic downturn to a the demise of the Second Bank of the United States in 1832 b over issuance of gold coins by the US Mint c over expansion by the manufacturing sector d external forces including large in ows of specie from Mexico and Europe All of the following are examples of state regulations on banks except a the Suffolk System b the Safety Fund System c required bond deposits with a state authority prior to chartering d the Forstall System The Forstall system was the antebellum banking regulation in a New England b the old Northwest Ohio Indiana Illinois and neighboring states c New York state d Louisiana States that developed successful and sound commercial banking systems in the antebellum period included all of the following except a New York b Ohio c Michigan d Louisiana Which of the following antebellum banking innovations was the forerunner of the modern Federal Deposit Insurance Corporation FDIC a the Suffolk System b the Safety Fund Act c the Forstall System d the bimetallic standard 17 What best describes the US experience with banking from 1785 until the Civil War a There was a national bank for the entire ti1ne period b The first two national banks were largely foreign owned c Only gold was used to back currency d Only national banks could print notes 18 Which was not a result of the California gold rush a A substantial increase in the money supply b A large increase in GNP c A significant decrease in the prices of farm goods ECONOMIC INSIGHTS 1 What is typically not considered a characteristic of a central bank a The bank backs its currency with gold or silver b The bank has considerable control over the stock of money and uses this control to moderate uctuations in credit conditions and prices c The bank regulates other banks d The bank lends a lot of money to the government e The bank serves as a lender of last resort to other banks by lending them money when no one else will 2 According to Hume s price specie ow mechanism a sudden increase in the money stock of Country A will a cause an i1nmediate de ation in Country A b lead to an increase in Country A s i1nports relative to its exports c lead to an increase in Country A s exports relative to its iInports d cause specie from the rest of the world to ow into Country A ECONOMIC ANALYSIS 1 In the 1850s the proportion of silver in the currency supply fell and the proportion of gold rose This is an illustration of the quantity theory of money Gresham39s Law Say39s Law the Walrasian auctioneer lt violates every known law of economics 39DP UU SD 2 If the market ratio of silver to gold is 16 to 1 and the mint ratio is 15 to 1 then a people will cease to use gold and silver as money b the Treasury will be forced to issue paper money c gold is overvalued at the mint d silver is overvalued at the mint 3 The Coinage Act of 1792 set the relative values of silver and gold coins at 15 to 1 Suppose the relative values of silver and gold in the market was 14 to 1 In this case a only silver would circulate as money b silver would be hoarded or sold abroad c silver would be overvalued at the mint d both gold and silver would circulate as money Return to Pennnmim 1740 Practice Exam Page Chapter 28 Money Banking and the Business Cycle after World War 11 GENERAL QUESTIONS 4 N U 4 U1 Stagflation is defined as a the simultaneous occurrence of high in ation and high unemployment b high in ation accompanied by falling interest rates c declining GDP accompanied by a stable price level d a persistent decline in the price level that is unresponsive to monetary and fiscal policies Fiscal policy ailns to in uence the overall health of the economy through changes in a the money supply b government spending and tax rates c interest rates d international exchange rates e all of the above Monetary policy is primarily exercised by a Congress b the president c the Federal Reserve d the Treasury Department Which of the following economists is often credited with establishing the monetarist school of thought a John Maynard Keynes b Arthur Laffer c A W Phillips d Milton Friedman The belief that government spending is necessary to offset sluggish private investment demand is associated with a monetarism b supply side economics c Keynesianism d rational expectations theory 0 1 00 J H H Policies adopted by the Truman administration effectively avoided in ation during the Korean War These policies included increased personal and corporate tax rates price and wage controls reduced purchases of government debt by the Federal Reserve discontinuance of the practice of pegging interest rates all of the above mgpr Which of the following historical events is often cited as an example of the successful implementation of Keynesian theory a the Kennedy Johnson tax cut of 1964 the price controls of the Nixon administration the anti in ation policies of the Carter administration the series of tax cuts implemented by the Reagan administration during the 1980s b c d Following World War II the United States and most developed countries adopted a system of fixed exchange rates known as a the Heller plan b the new gold standard c the Bretton Woods system d the Geneva accord The Bretton Woods system a allowed for market determined exchange rates b ended the use of the gold standard in all participating countries c led to a dramatic increase in the US balance of payments deficit d resulted in the rapid increase of the US gold supply in the 1960s e all of the above The US economy of the 1960s a was continuously plagued by low output and high unemployment b is notable because the in ation rate reached double digit levels c presents a rare example of de ation in a developed economy d enjoyed the longest expansion that the country had experienced since before WWII Beginning in 1971 the Nixon administration enacted a series of price controls in hopes of reducing inflation The first known as Phase I a consisted of a complete price freeze b imposed a ceiling price on meat but left other prices unregulated c froze wages but left other prices unregulated d applied only to oil prices 12 Following the lifting of price controls that had been implemented in the early 1970s in ation skyrocketed Economists explanations for this acceleration in the price level include a b an e the increase in the money supply that also occurred during the early 1970s increases in the federal government deficit especially in 1971 and 1972 supply side shocks in oil and food the release of in ationary pressures that built up during the period of price controls all of the above 13 Fiscal and monetary policies adopted by the Carter administration in the first half of his term resulted in a b C d stable prices and low unemployment de ation a rapid rise in the inflation rate a balanced federal budget 14 In the early 1980s many people found themselves unable to purchase new homes because of a b C d rising prices and interest rates rising prices and falling interest rates new government restrictions on mortgages for first tirne buyers increases in income tax rates 15 In his book The Economic Consequences of Peace John Maynard Keynes writes There is no subtler no surer means of overturning the existing basis of society than to debauch the currencyquot Keynes credits as having originally expressed this belief a b C d Irving Fisher Alfred Marshall VIadirnir Lenin Adolf Hitler 16 In his 1967 address to the American Economic Association Milton Friedman explained that increases in the money supply will temporarily reduce unemployment because a b C d wages do not respond to monetary policy unions support policies that increase in ation in ation benefits lenders prices rise faster than wages 17 Under the leadership of Federal Reserve Chairman the double digit in ation of the 1970s and early 1980s was finally reduced using policies advocated by monetarists a b C d H 00 C d H 3 Milton Friedman Alan Greenspan Paul Volcker Alfred Kahn The Laffer curve expresses a relationship between a b tax rates and tax revenues in ation and unemployment interest rates and saving money supply and the price level The Reagan administration s experiment with supply side economics produced a historic period of economic expansion that was accompanied by a falling real interest rates b high unemployment rates c d e all of the above C d N H a b C d N N a dramatic increase in the federal government s budget deficit a reduction in the US trade deficit The Federal Reserve chair with the longest tenure is a b Alan Greenspan Paul Volcker Milton Friedman Arthur Laffer During his tenure as chair Alan Greenspan has firmly adhered to a policy of steady growth in the money supply at precisely the same rate over ti1ne policies designed to promote price stability policies that encouraged large and rapid increases in stock prices a policy of fixed interest rates Following WWII savings and loan associations SampLs emerged as serious competitors of commercial banks especially in the market for a b C d loans to new businesses home mortgages trust funds government bond sales 23 Factors that led to the SampL crisis of the 1980s include a over investment by SampLs in high risk real estate ventures b SampL investments in junk bonds c fraud within the SampL industry d perverse incentives created by government insurance on SampL deposits e all of the above 24 Banking crises of the 1980s include all of the following except a a wave of bankruptcies in the SampL industry b Mexico s announcement that it was unable to repay its debt obligations c a bank run on Continental Illinois Bank d Chase Manhattan Bank s declaration of bankruptcy ECONOMIC INSIGHTS 1 When it was introduced in 1958 the Phillips curve presented policy makers with a menu from which they could choose the appropriate a combination of monetary and fiscal policy b combination of in ation and unemployment c level of aggregate money supply d income tax rate 2 Over tilne the Phillips curve has a remained stable b shifted downward c shifted upward d has become positively sloped 3 Robert Lucas and his followers have argued that the Philips curve appears to be a a vertical line b horizontal line c negatively sloped curve d positively sloped curve ECONOMIC ANALYSIS 1 According to the Fisher effect if a lender and a borrower would agree on an interest rate of 8 percent when no in ation is expected they should set a rate of when an in ation rate of 3 percent is expected 2 percent 5 percent 8 percent 11 percent QOWN Return to Pennnmim 1740 Practice Exam Page
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