Deck 24: The New Deal

Question 1

In which of the following areas were substantial New Deal reforms NOT made?

A) The commercial banking system.
B) The Federal Reserve System.
C) Securities markets.
D) Corporate accounting standards.

Answer 1

Corporate accounting standards.

Question 2

Concerning the effect of New Deal farm measures, Walton and Rockoff conclude that the New Deal _____.

A) simply failed to help farmers because the farmer's terms of trade did not improve.
B) helped the farmer to a limited extent primarily through the stimulation of aggregate demand.
C) helped the farmer to a substantial extent by limiting farm output.
D) helped the farmer to a substantial extent by increasing farm output.

Answer 2

helped the farmer to a substantial extent by limiting farm output.

Question 3

What most accurately describes the implementation of the New Deal?

A) It was implemented in two phases over the course of about eight years.
B) Its major reforms were implemented in the first 100 days of Franklin Roosevelt's Presidency.
C) The first elements of the New Deal that were implemented were the most politically liberal.
D) Most of the reforms were temporary and were phased out by World War II.

Answer 3

It was implemented in two phases over the course of about eight years.

Question 4

Most economists have argued that the persistence of high unemployment despite New Deal policies

A) constitutes a complete repudiation of New Deal policies.
B) was the result of "sticky" wages.
C) was in part the result of pressures from government to maintain wages.
D) Both b and c are correct.

Question 5

During the Great Depression, union membership _____ due to _____.

A) expanded, greater cooperation between radicals and conservatives in the labor movement.
B) expanded, the passage of pro-union legislation.
C) contracted, greater conflict between radicals and conservatives in the labor movement.
D) contracted, people wouldn't risk losing their jobs by joining a union when unemployment was high.

Question 6

Which were among the important reforms of the banking system that resulted from the financial crisis of the 1920 and 1930s?

A) the Glass-Steagall Act
B) the prohibition of interest payments on bank deposits
C) the separation of commercial banking from investment banking
D) All of the above are correct.
E) Only a and c are correct.

Question 7

Which United States President is most closely identified with the New Deal?

A) Calvin Coolidge.
B) Herbert Hoover.
C) Franklin Roosevelt.
D) Theodore Roosevelt.
E) Richard Nixon.

Question 8

What was not a significant cause of the Great Depression?

A) Bank failures.
B) Stock market crash
C) Government fiscal and monetary policy.
D) Large increase in imports that took jobs away from American workers.

Question 9

Which of the following was NOT a prominent New Deal reform?

A) Monetary power was centralized.
B) The gold standard was eliminated.
C) Implementation of deposit insurance.
D) Separation of commercial from investment banking.

Question 10

The New Deal policies both relieved distress and reformed the system to prevent future depressions. An example of the former is the ___ while the ___ is an example of the latter.

A) Civilian Conservation Corps; Works Projects Administration.
B) Works Projects Administration; Industrial Organization Review Board.
C) Civilian Conservation Corps; Securities and Exchange Commission.
D) Federal Deposit Insurance Corporation; Industrial Organization Review Board.

Question 11

Which of the following is least accurate about labor and employment during the Great Depression?

A) New social security programs were established.
B) The price level decreased.
C) Average real wages decreased.
D) Unemployment rates dropped throughout the course of the Great Depression.

Question 12

Which of the following did the Fair Labor Standards Act (FLSA) of 1938 not accomplish?

A) Lowered the maximum work week to 44 hours for many industries.
B) Outlawed companies' rights to break union strikes.
C) Prohibited many forms of child labor.
D) Set a minimum wage for laborers.

Question 13

The National Recovery Act

A) largely redistributed rather than expanded incomes.
B) cut unemployment in half.
C) was declared unconstitutional by the Supreme Court.
D) Both a and b are correct.
E) Both a and c are correct.

Question 14

According to Friedman and Schwartz, the most important structural change in the banking system to result from the 1933 panic

A) were laws barring short calls on equities.
B) was Federal insurance of bank deposits.
C) was an unprecedented increase in regulation.
D) was the loss of public confidence.

Question 15

Which United States President is most closely identified with the Great Depression?

A) Calvin Coolidge.
B) Herbert Hoover.
C) Franklin Roosevelt.
D) Theodore Roosevelt.
E) Richard Nixon.

Question 16

What was not one of the government's strategies to pull the nation out of the Great Depression?

A) Large subsidies for manufacturing companies.
B) Sizable increases in employment of emergency workers.
C) Development of the Federal Deposit Insurance Corporation (FDIC).
D) Institute price controls for farmers.

Question 17

Which of the following was NOT a component of the National Recovery Act (NIRA)?

A) Set minimum prices for goods.
B) Set minimum wages.
C) Set a minimum number of hours of work.
D) Institute codes of fair practice for various industries.

Question 18

The Commodity Credit Corporation (CCC) instituted several policies to improve the welfare of farmers. Which of the following best describes the programs' effects?

A) The CCC price supports mandated a one-price policy on all agricultural goods.
B) The CCC support prices became minimum prices in the marketplace.
C) The CCC price supports inefficiently allocated resources, which decreased welfare.
D) If the commodity price increased, according to the free market, then the CCC would command and collect "excess" profits, i.e., revenues in excess of the one-price policy, for use as loanable funds.

Question 19

The text discusses unions in the context of the New Deal. It concludes that there was _____ in organized labor's relationship with government because _______.

A) deterioration; Roosevelt's early speeches had created excessively high expectations.
B) an improvement; labor gained the right to strike and organize free of employer interference.
C) deterioration; organized labor was made subject to the same controls as big business.
D) an improvement; military preparations reduced unemployment.

Question 20

Which of the following is MOST accurate about the early years of the Great Depression?

A) The price that farmers paid for farming inputs dropped, but the price they received for the products they sold dropped even more.
B) The price that farmers paid for farming inputs increased, forcing more farmers into debt
C) The debt of farmers decreased
D) The price that farmers received for the products they sold increased.

Question 21

What is not one of the reasons why farmers prefer price supports more than direct income supplements?

A) Direct income supplements tend to remain fixed over time.
B) Direct income supplements tend to provide lower benefits.
C) Direct income supplements tend to go predominantly to poor farmers.
D) Direct income supplements tend to be viewed as demeaning.