Question 1

For much of the 1940s, 50s and 60s, macroeconomic policymaking in the U.S. and abroad was dominated by

Accepted Answer

A)  the ideas advanced in Keynes's General Theory . 
B)  the ideas advanced in Friedman's Monetary History of the U.S. 
C)  the supply-side theories of Arthur Laffer and David Stockman. 
D)  Robert Lucas's theories of business cycles. 
A)  the ideas advanced in Keynes's General Theory . 
B)  the ideas advanced in Friedman's Monetary History of the U.S. 
C)  the supply-side theories of Arthur Laffer and David Stockman. 
D)  Robert Lucas's theories of business cycles.

Question 2

The Reagan administration's experiment with supply-side economics produced a historic period of economic expansion that was accompanied by

Accepted Answer

A)  falling real interest rates. 
B)  high unemployment rates. 
C)  a dramatic increase in the federal government's budget deficit. 
D)  a reduction in the U.S. trade deficit. 
E)  All of the above. 
A)  falling real interest rates. 
B)  high unemployment rates. 
C)  a dramatic increase in the federal government's budget deficit. 
D)  a reduction in the U.S. trade deficit. 
E)  All of the above.

Question 3

The housing market of the early to mid 2000s did not feature

Accepted Answer

A)  "teaser rates" on home mortgages. 
B)  a dramatic rise in housing prices. 
C)  widespread calls to end "predatory" lending practices. 
D)  "subprime" mortgages. 
A)  "teaser rates" on home mortgages. 
B)  a dramatic rise in housing prices. 
C)  widespread calls to end "predatory" lending practices. 
D)  "subprime" mortgages.

Question 4

Which of the following economists is often credited with establishing the monetarist school of thought?

Accepted Answer

A)  John Maynard Keynes 
B)  Arthur Laffer 
C)  A. W. Phillips 
D)  Milton Friedman 
A)  John Maynard Keynes 
B)  Arthur Laffer 
C)  A. W. Phillips 
D)  Milton Friedman

Question 5

Alan Greenspan's overall approach to monetary policy

Accepted Answer

A)  has been credited in part for the expansion of the 1990s. 
B)  relied heavily on the monetization of debt during economic downturns. 
C)  typically responded to economic downturns by lowering the federal funds rate. 
D)  Both a and b are correct. 
E)  both a and c are correct. 
A)  has been credited in part for the expansion of the 1990s. 
B)  relied heavily on the monetization of debt during economic downturns. 
C)  typically responded to economic downturns by lowering the federal funds rate. 
D)  Both a and b are correct. 
E)  both a and c are correct.

Question 6

Beginning in 1971, the Nixon administration enacted a series of price controls in hopes of reducing inflation.  The first of these, known as Phase I,

Accepted Answer

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. 
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.

Question 7

Milton Friedman explained that increases in the money supply will temporarily reduce unemployment because

Accepted Answer

A)  wages do not respond to monetary policy. 
B)  unions support policies that increase inflation. 
C)  inflation benefits lenders. 
D)  prices rise faster than wages. 
A)  wages do not respond to monetary policy. 
B)  unions support policies that increase inflation. 
C)  inflation benefits lenders. 
D)  prices rise faster than wages.

Question 8

During which Presidential administration did the United States both end its commitment to Bretton Woods and institute significant wage and price controls?

Accepted Answer

A)  Dwight Eisenhower. 
B)  Richard Nixon. 
C)  Jimmy Carter. 
D)  William Clinton. 
A)  Dwight Eisenhower. 
B)  Richard Nixon. 
C)  Jimmy Carter. 
D)  William Clinton.

Question 9

According to the Fisher effect, if a lender and a borrower would agree on an interest rate of 8 percent when no inflation is expected, they should set a rate of _______ when an inflation rate of 3 percent is expected.

Accepted Answer

A)  2 percent 
B)  5 percent 
C)  8 percent 
D)  11 percent 
A)  2 percent 
B)  5 percent 
C)  8 percent 
D)  11 percent

Question 10

The entrance of the U.S. into the Korean War in June of 1950 led to

Accepted Answer

A)  deflation. 
B)  an increase in the unemployment rate. 
C)  a long and deep recession. 
D)  a surge in consumer demand. 
E)  All of the above. 
A)  deflation. 
B)  an increase in the unemployment rate. 
C)  a long and deep recession. 
D)  a surge in consumer demand. 
E)  All of the above.

Question 11

The economic downturn of the early 2000s and its aftermath did not include.

Accepted Answer

A)  tax cuts. 
B)  low interest rates. 
C)  a strong increase in employment. 
D)  a boom in real estate. 
A)  tax cuts. 
B)  low interest rates. 
C)  a strong increase in employment. 
D)  a boom in real estate.

Exam 28: Monetary Policy, Fiscal Policy, and the Business Cycle After World War Ii

For much of the 1940s, 50s and 60s, macroeconomic policymaking in the U.S. and abroad was dominated by

The Reagan administration's experiment with supply-side economics produced a historic period of economic expansion that was accompanied by

The housing market of the early to mid 2000s did not feature

Which of the following economists is often credited with establishing the monetarist school of thought?

Alan Greenspan's overall approach to monetary policy

Beginning in 1971, the Nixon administration enacted a series of price controls in hopes of reducing inflation. The first of these, known as Phase I,

Milton Friedman explained that increases in the money supply will temporarily reduce unemployment because

During which Presidential administration did the United States both end its commitment to Bretton Woods and institute significant wage and price controls?

According to the Fisher effect, if a lender and a borrower would agree on an interest rate of 8 percent when no inflation is expected, they should set a rate of _______ when an inflation rate of 3 percent is expected.

The entrance of the U.S. into the Korean War in June of 1950 led to

The economic downturn of the early 2000s and its aftermath did not include.

Growth, Welfare, and the American Economy

Founding the Colonies

Colonial Economic Activities

The Economic Relations of the Colonies

Economic Progress and Wealth

Three Crises and Revolt

Hard Realities for a New Nation

Land and the Early Westward Movements

Transportation and Market Growth

Market Expansion and Industry in First Transition

Labor During the Early Industrial Period

Money and Banking in the Developing Economy

The Entrenchment of Slavery and Regional Conflict

War, Recovery, and Regional Divergence

Agricultures Western Advance

Railroads and Economic Change

Industrial Expansion and Concentration

The Emergence of Americas Labor Consciousness

Money, Prices, and Finance in the Postbellum Era

Commerce at Home and Abroad

World War I, 1914-1918

The Roaring Twenties

The Great Depression

The New Deal

World War Ii

The Changing Role of the Federal Government

The Changing Role of the Federal Government: Consumer Safety, Agriculture, the Environment, and Housing

Manufacturing, Productivity, and Labor

Achievements of the Past, Challenges for the Future

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