Question 1

What did automobiles and government subsidized highways increase the net benefits of?

Accepted Answer

A)  Investing privately in highway development 
B)  Rapid expansion of new cities and towns and revitalization ?in old cities and towns 
C)  Development of suburban and exurban areas 
D)  All of the above 
A)  Investing privately in highway development 
B)  Rapid expansion of new cities and towns and revitalization ?in old cities and towns 
C)  Development of suburban and exurban areas 
D)  All of the above C

Question 2

Explain why some groups believed that the social benefits of national Prohibition were less than the costs.In your explanation,mention the unintended consequences of Prohibition.

Accepted Answer

Some groups believed that the social benefits of national Prohibition were less than the costs for a variety of reasons. One of the main reasons is that Prohibition led to a rise in organized crime and illegal underground activities. Instead of reducing alcohol consumption and its related problems, Prohibition led to the creation of a black market for alcohol, which in turn fueled criminal activities such as bootlegging, speakeasies, and the rise of organized crime syndicates.

Another unintended consequence of Prohibition was the increase in corruption among law enforcement officials and government agencies. Bribery and other forms of corruption became rampant as people sought to bypass the laws and continue consuming alcohol. This eroded trust in the government and the legal system, and it also diverted resources away from more pressing issues.

Additionally, Prohibition led to a decline in tax revenue for the government as legal alcohol sales were a significant source of income. The loss of this revenue had a negative impact on social programs and public services, leading to a decrease in overall social welfare.

Furthermore, Prohibition also had negative effects on public health, as the consumption of unregulated and potentially dangerous alcohol became more common. This led to an increase in alcohol-related health issues and fatalities.

In conclusion, the unintended consequences of Prohibition, including the rise of organized crime, corruption, loss of tax revenue, and negative public health effects, led many to believe that the social costs outweighed the benefits of national Prohibition.

Question 3

Why was the stock market crash of 1929 a disaster for the economy?

Accepted Answer

A)  Through the "wealth effect," investors lost paper wealth and consequently ?reduced their spending on goods and services. This led to cutbacks in ?production and jobs. 
B)  Businessmen became pessimistic about the future and reduced spending on ?plants and equipment, thus causing reduced production and increased layoffs ?in the capital-goods sector of the economy. 
C)  The crash revealed a flawed structure of credit and weak system of banks ?and other financial institutions in the U.S. 
D)  All of the above are correct 
A)  Through the "wealth effect," investors lost paper wealth and consequently ?reduced their spending on goods and services. This led to cutbacks in ?production and jobs. 
B)  Businessmen became pessimistic about the future and reduced spending on ?plants and equipment, thus causing reduced production and increased layoffs ?in the capital-goods sector of the economy. 
C)  The crash revealed a flawed structure of credit and weak system of banks ?and other financial institutions in the U.S. 
D)  All of the above are correct D

Question 4

Explain why people buy stocks.Identify the factors that influence common stock purchases.Identify the sources of the increase in demand for stock and explain the 226 percent rise in the 1929 common stock index over the 1920 index.

Accepted Answer

There are several reasons why people buy

Question 5

Some researchers argue that the overall standard of living increased during the 1920s.In general,holding constant all other factors that might impact it,economists are careful about connecting an increase in the standard of living to

Accepted Answer

A)  increases in the amount of labor used in production processes. 
B)  new inventions being made in research laboratories. 
C)  increases in the output of goods and services per worker. 
D)  the discovery of new sources of gold and silver. 
A)  increases in the amount of labor used in production processes. 
B)  new inventions being made in research laboratories. 
C)  increases in the output of goods and services per worker. 
D)  the discovery of new sources of gold and silver.

Question 6

In answer to the question,"Could they see the Great Depression coming?",Hughes and Cain (2011)respond:

Accepted Answer

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 built to sustain high and stable ?rates of growth with minimal cyclical fluctuation when markets were permitted to clear themselves without government interference. 
C)  Yes-in the late 1920s, a majority of economists reported and publicized that the economy?was becoming dangerously unbalanced and that a serious downturn was near. 
D)  Yes and no-by the late 1920s, the economics profession was about equally split on the possibility of a serious downturn in the near future. 
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 built to sustain high and stable ?rates of growth with minimal cyclical fluctuation when markets were permitted to clear themselves without government interference. 
C)  Yes-in the late 1920s, a majority of economists reported and publicized that the economy?was becoming dangerously unbalanced and that a serious downturn was near. 
D)  Yes and no-by the late 1920s, the economics profession was about equally split on the possibility of a serious downturn in the near future.

Question 7

On the surface,perhaps,the decade of the 1920s appears to be one of the healthiest periods of economic growth and general prosperity in U.S.history.However,in retrospect,several weaknesses or unhealthy developments were evident.These negative developments contributed to the economic collapse of the 1930s.List and describe them.

Accepted Answer

The 1920s were indeed a period of econom

Question 8

Describe the new type of consumption spending that surfaced in the 1920s.How was some of it financed?

Accepted Answer

In the 1920s, a new type of consumption

Question 9

The decline in wholesale and consumer prices in 1929-30 was not as large as had been the decline?in 1920-21.

Accepted Answer

A) True 
 B)False

Question 10

After 1926,a decline in total building construction occurred even though building costs remained fairly stable.

Accepted Answer

A) True 
 B)False

Question 11

Farm prices fell sharply in 1919-21.Then,until 1929,the farm "terms of trade" (the movement of farm prices relative to the movement of non-farm prices)

Accepted Answer

A)  collapsed by more than half. 
B)  remained essentially unchanged. 
C)  actually rose. 
D)  collapsed, but only slightly. 
A)  collapsed by more than half. 
B)  remained essentially unchanged. 
C)  actually rose. 
D)  collapsed, but only slightly.

Question 12

The 1920s is sometimes described as the decade representing the emergence of "mass society."?This refers to developments in all of the following except

Accepted Answer

A)  Production methods and communication systems 
B)  Consumption patterns and installment credit 
C)  Attitudes and culture 
D)  There is no "except"; all of the above are part of the emergence of "mass society" 
A)  Production methods and communication systems 
B)  Consumption patterns and installment credit 
C)  Attitudes and culture 
D)  There is no "except"; all of the above are part of the emergence of "mass society"

Question 13

The stage of industrial development during the early part of the 20th century is usually referred to ?as Fordism.The characteristics of this system include all of the following except

Accepted Answer

A)  Moving assembly-line production 
B)  Mass production of relatively inexpensive consumer goods 
C)  The extensive use of skilled labor to produce complex consumer goods 
D)  Consumer durable goods purchased on installment credit 
A)  Moving assembly-line production 
B)  Mass production of relatively inexpensive consumer goods 
C)  The extensive use of skilled labor to produce complex consumer goods 
D)  Consumer durable goods purchased on installment credit

Question 14

The economist John Kenneth Galbraith (1979)lists several major sources of weakness in the economy that laid the groundwork for the collapse of the 1930s.These sources include all ?of the following except

Accepted Answer

A)  A weak banking structure 
B)  Ignorance of the economy's problems by the nation's leaders 
C)  An overgrown federal bureaucracy with extensive regulation of the private economy 
D)  An increasingly unequal distribution of income 
A)  A weak banking structure 
B)  Ignorance of the economy's problems by the nation's leaders 
C)  An overgrown federal bureaucracy with extensive regulation of the private economy 
D)  An increasingly unequal distribution of income

Question 15

Electricity and internal combustion engines are general-purpose technologies.They permit the functioning of a wide range of goods,service and production systems.

Accepted Answer

A) True 
 B)False

Question 16

The stock market boom in 1922-1929 seems "rational" enough if you take into account the expansion of the money supply in the same period.

Accepted Answer

A) True 
 B)False

Question 17

Income distribution moved toward greater inequality in the 1920s after World War I (1914-18)had witnessed a movement toward greater equality.

Accepted Answer

A) True 
 B)False

Question 18

What is/are the lesson(s)learned from the stock market crash of 1929?

Accepted Answer

A)  Statements and opinions of federal officials can and do impact consumer and business optimism and pessimism regarding stocks and other financial markets, leading to volatile buying and selling behaviors. 
B)  Portfolio diversification is important. 
C)  One segment of the aggregate market economy can experience events that impact the economy?as a whole. 
D)  Reflection, analysis and evaluation are often required to understand why an event occurred and what can be done to prevent it from happening in the future. 
A)  Statements and opinions of federal officials can and do impact consumer and business optimism and pessimism regarding stocks and other financial markets, leading to volatile buying and selling behaviors. 
B)  Portfolio diversification is important. 
C)  One segment of the aggregate market economy can experience events that impact the economy?as a whole. 
D)  Reflection, analysis and evaluation are often required to understand why an event occurred and what can be done to prevent it from happening in the future.

Question 19

Discuss the relationships among (i)increases in real wages,(ii)installment payment plans and?(iii)financial intermediation.

Accepted Answer

Increases in real wages, installment pay

Question 20

Wartime mobilization during World War I raised the shares of income going to labor.This increase continued through the 1920s.

Accepted Answer

A) True 
 B)False

Exam 23: “Normalcy”: 1919–1929

What did automobiles and government subsidized highways increase the net benefits of?

Explain why some groups believed that the social benefits of national Prohibition were less than the costs.In your explanation,mention the unintended consequences of Prohibition.

Why was the stock market crash of 1929 a disaster for the economy?

Explain why people buy stocks.Identify the factors that influence common stock purchases.Identify the sources of the increase in demand for stock and explain the 226 percent rise in the 1929 common stock index over the 1920 index.

Some researchers argue that the overall standard of living increased during the 1920s.In general,holding constant all other factors that might impact it,economists are careful about connecting an increase in the standard of living to

In answer to the question,"Could they see the Great Depression coming?",Hughes and Cain (2011)respond:

Describe the new type of consumption spending that surfaced in the 1920s.How was some of it financed?

The decline in wholesale and consumer prices in 1929-30 was not as large as had been the decline?in 1920-21.

After 1926,a decline in total building construction occurred even though building costs remained fairly stable.

Farm prices fell sharply in 1919-21.Then,until 1929,the farm "terms of trade" (the movement of farm prices relative to the movement of non-farm prices)

The 1920s is sometimes described as the decade representing the emergence of "mass society."?This refers to developments in all of the following except

The stage of industrial development during the early part of the 20th century is usually referred to ?as Fordism.The characteristics of this system include all of the following except

The economist John Kenneth Galbraith (1979)lists several major sources of weakness in the economy that laid the groundwork for the collapse of the 1930s.These sources include all ?of the following except

Electricity and internal combustion engines are general-purpose technologies.They permit the functioning of a wide range of goods,service and production systems.

The stock market boom in 1922-1929 seems "rational" enough if you take into account the expansion of the money supply in the same period.

Income distribution moved toward greater inequality in the 1920s after World War I (1914-18)had witnessed a movement toward greater equality.

What is/are the lesson(s)learned from the stock market crash of 1929?

Discuss the relationships among (i)increases in real wages,(ii)installment payment plans and?(iii)financial intermediation.

Wartime mobilization during World War I raised the shares of income going to labor.This increase continued through the 1920s.

Overseas Empire

Colonial Development

America on the Eve of Revolution

Gaining Independence

Westward Expansion

Population and Labor Force

Law and the Rise of Classical American Capitalism

Transportation, Internal Improvements, and Urbanization

Agricultural Expansion: The Conflict of Two Systems on the Land

The Debate over Slavery

The Early Industrial Sector

The Financial System and the International Economy

Economic Effects of the Civil War

Railroads and Economic Development

Post-Civil War Agriculture

Population Growth and the Atlantic Migration

Industrialization, Entrepreneurship, and Urban Growth

Big Business and Government Intervention

Financial Developments 1863–1914

The Giant Economy and Its International Relations

Labor and the Law

The Command Economy Emerges: World War I

The Great Depression

The New Deal

The “Prosperity” of Wartime

Before the New Frontier: The Postwar Economy

Population, Health, and Labor

Postwar Industry and Agriculture

To the New Millennium and Beyond

Does Our Past Have a Future?

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