Question 1

A secondary effect of installment credit was the

Accepted Answer

A)  development of a new market in used durables. 
B)  emergence of a new network of dependable supplies of electric power. 
C)  surge in prices. 
D)  increased government intervention in household activity. 
A)  development of a new market in used durables. 
B)  emergence of a new network of dependable supplies of electric power. 
C)  surge in prices. 
D)  increased government intervention in household activity.

Question 2

Installment-plan buying permits consumers to use the income generated from their private assets to pay for goods and services.

Accepted Answer

A) True 
 B)False

Question 3

The federal government's fiscal policy (taxing and spending policy)during the 1920s was ?one in which

Accepted Answer

A)  the federal budget was in surplus every year. 
B)  the federal budget exerted a mildly deflationary impact on the economy, ?tending to slow overall spending in the economy. 
C)  Parkinson's third law, "expenditures rise to meet income," ?seemed to hold for the federal government. 
D)  all of the above applied. 
A)  the federal budget was in surplus every year. 
B)  the federal budget exerted a mildly deflationary impact on the economy, ?tending to slow overall spending in the economy. 
C)  Parkinson's third law, "expenditures rise to meet income," ?seemed to hold for the federal government. 
D)  all of the above applied.

Question 4

Unlike the 1920-21 episode,1929-30 farm prices stood up fairly well when other prices fell.

Accepted Answer

A) True 
 B)False

Question 5

The legislative immigration restrictions following World War I (1914-18)contributed to which of the following in the 1920s?

Accepted Answer

A)  An acceleration in the growth in the U.S. population 
B)  A decline in the rate of household formation in the U.S. 
C)  Rapid rise in U.S. prices 
D)  High unemployment in the U.S. 
A)  An acceleration in the growth in the U.S. population 
B)  A decline in the rate of household formation in the U.S. 
C)  Rapid rise in U.S. prices 
D)  High unemployment in the U.S.

Question 6

Between 1921 and 1929,general prices as measured by wholesale or consumer prices

Accepted Answer

A)  were stable overall. 
B)  fell dramatically. 
C)  increased moderately. 
D)  increased significantly. 
A)  were stable overall. 
B)  fell dramatically. 
C)  increased moderately. 
D)  increased significantly.

Question 7

During the decade of the 1920s,the U.S.economy

Accepted Answer

A)  was generally healthy and gave no indication of the troubles that lay ahead regarding ?the Great Depression. 
B)  was relatively stagnant in terms of growth of total output with small declines in agriculture ?and housing, which suggested that difficult times might lie ahead in the 1930s. 
C)  experienced actual declines in overall production levels, including agriculture and housing, which suggested that even more difficult times probably lay ahead. 
D)  experienced relatively rapid growth in overall output but in the late 1920s nevertheless ?showed weaknesses in certain sectors such as agriculture, housing and the financial ?sector, which suggested the possibility of difficult times ahead. 
A)  was generally healthy and gave no indication of the troubles that lay ahead regarding ?the Great Depression. 
B)  was relatively stagnant in terms of growth of total output with small declines in agriculture ?and housing, which suggested that difficult times might lie ahead in the 1930s. 
C)  experienced actual declines in overall production levels, including agriculture and housing, which suggested that even more difficult times probably lay ahead. 
D)  experienced relatively rapid growth in overall output but in the late 1920s nevertheless ?showed weaknesses in certain sectors such as agriculture, housing and the financial ?sector, which suggested the possibility of difficult times ahead.

Question 8

During the years prior to the Great Depression (the 1920s),farmers were

Accepted Answer

A)  experiencing an increase in the value of farm output. 
B)  enjoying rising incomes and prosperity in spite of interest charges and taxes on real estate. 
C)  experiencing stagnant incomes. 
D)  experiencing declining incomes and hard times. 
A)  experiencing an increase in the value of farm output. 
B)  enjoying rising incomes and prosperity in spite of interest charges and taxes on real estate. 
C)  experiencing stagnant incomes. 
D)  experiencing declining incomes and hard times.

Question 9

Buying securities on the margin requires people interested in buying stocks to pay only a percentage (a margin)of the actual purchase price.The rest is borrowed from someone else,usually an investor's broker.

Accepted Answer

A) True 
 B)False

Question 10

Define the business cycle.Compare the length,depth and breadth of the business cycle in an economy where people are left in control of their own resources to that business cycle where the government attempts to buffer upticks in unemployment,subdue decreases in wages and protect against the loss of production.

Accepted Answer

The business cycle refers to the natural

Question 11

Economic prosperity returned under the New Deal programs of the 1930s.

Accepted Answer

A) True 
 B)False

Question 12

According to Galbraith (1979),there were five major signs that the economy was dangerously unhealthy in the 1920s.What were they? Do other economists agree with Galbraith? Why or ?why not?

Accepted Answer

According to Galbraith (1979), the five

Question 13

Discuss Lampman's (1962)and Williamson and Lindert's (1981)research on patterns of income and wealth distribution from colonial times to 1932.

Accepted Answer

Lampman's (1962) research on patterns of

Question 14

Which of the following entities was blamed in part for the speculative activity leading to the crash?of 1929?

Accepted Answer

A)  Large manufacturing enterprises 
B)  Brokers and their firms who extended loans to customers interested in ?buying stocks on the margin 
C)  The Federal Reserve System 
D)  New mom and pop businesses 
A)  Large manufacturing enterprises 
B)  Brokers and their firms who extended loans to customers interested in ?buying stocks on the margin 
C)  The Federal Reserve System 
D)  New mom and pop businesses

Question 15

In terms of changes in real Gross National Product (GNP),prices,unemployment and income distribution,compare and contrast the 1929-1930 and 1920-1921 economic contractions.How did the 1929-1930 collapse distinguish itself from the 1920-1921 recession?

Accepted Answer

The 1929-1930 economic contraction, also

Question 16

In September 1929,Roger Babson predicted the collapse of the stock market.

Accepted Answer

A) True 
 B)False

Question 17

During the 1920s,what changes in the demand for and supply of building construction signaled that times of economic distress could be ahead?

Accepted Answer

During the 1920s, several changes in the

Question 18

The stock market boom of the 1920s occurred in part because the demand for stocks increased.?The source of this demand increase originated from whom?

Accepted Answer

A)  Ordinary workers who experienced rising wages and now had incentive to invest in the stock market, thus driving up stock prices. 
B)  The people in the upper income strata; they received a high percentage of the increase in realized income during the 1920s and invested much of it in the stock market. 
C)  Farmers who, finding agriculture increasingly unprofitable, began investing in the stock market rather than in farm land and equipment. 
D)  Foreign investors who were optimistic about America's future and accordingly invested in American stocks. 
A)  Ordinary workers who experienced rising wages and now had incentive to invest in the stock market, thus driving up stock prices. 
B)  The people in the upper income strata; they received a high percentage of the increase in realized income during the 1920s and invested much of it in the stock market. 
C)  Farmers who, finding agriculture increasingly unprofitable, began investing in the stock market rather than in farm land and equipment. 
D)  Foreign investors who were optimistic about America's future and accordingly invested in American stocks.

Question 19

When the federal government makes no attempt to take corrective action,markets return a recessed economy to full employment levels of production by

Accepted Answer

A)  laying off workers. 
B)  lowering wages. 
C)  dropping prices. 
D)  doing all of the above. 
A)  laying off workers. 
B)  lowering wages. 
C)  dropping prices. 
D)  doing all of the above.

Question 20

Holding all else constant,when interest rates fall,

Accepted Answer

A)  yields on common stocks rise above yields on bonds. 
B)  yields on common stocks fall below yields on bonds. 
C)  yields on common stocks and bonds rise at an equal rate. 
D)  yields on common stocks and bonds fall at an equal rate. 
A)  yields on common stocks rise above yields on bonds. 
B)  yields on common stocks fall below yields on bonds. 
C)  yields on common stocks and bonds rise at an equal rate. 
D)  yields on common stocks and bonds fall at an equal rate.

Exam 23: “Normalcy”: 1919–1929

A secondary effect of installment credit was the

Installment-plan buying permits consumers to use the income generated from their private assets to pay for goods and services.

The federal government's fiscal policy (taxing and spending policy)during the 1920s was ?one in which

Unlike the 1920-21 episode,1929-30 farm prices stood up fairly well when other prices fell.

The legislative immigration restrictions following World War I (1914-18)contributed to which of the following in the 1920s?

Between 1921 and 1929,general prices as measured by wholesale or consumer prices

During the decade of the 1920s,the U.S.economy

During the years prior to the Great Depression (the 1920s),farmers were

Buying securities on the margin requires people interested in buying stocks to pay only a percentage (a margin)of the actual purchase price.The rest is borrowed from someone else,usually an investor's broker.

Economic prosperity returned under the New Deal programs of the 1930s.

According to Galbraith (1979),there were five major signs that the economy was dangerously unhealthy in the 1920s.What were they? Do other economists agree with Galbraith? Why or ?why not?

Discuss Lampman's (1962)and Williamson and Lindert's (1981)research on patterns of income and wealth distribution from colonial times to 1932.

Which of the following entities was blamed in part for the speculative activity leading to the crash?of 1929?

In terms of changes in real Gross National Product (GNP),prices,unemployment and income distribution,compare and contrast the 1929-1930 and 1920-1921 economic contractions.How did the 1929-1930 collapse distinguish itself from the 1920-1921 recession?

In September 1929,Roger Babson predicted the collapse of the stock market.

During the 1920s,what changes in the demand for and supply of building construction signaled that times of economic distress could be ahead?

The stock market boom of the 1920s occurred in part because the demand for stocks increased.?The source of this demand increase originated from whom?

When the federal government makes no attempt to take corrective action,markets return a recessed economy to full employment levels of production by

Holding all else constant,when interest rates fall,

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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