Question 1

The questions with which Chapter 16 is concerned include each of the following except&#10;A) how has the structure of the economy changed over the course of the past century?&#10;B) how has the business cycle changed over the past century?&#10;C) how has economic policy changed over the past century?&#10;D) how has economic theory changed over the past century?

Accepted Answer

Chapter 16 does not focus on changes in economic theory over the past century, but rather on changes in the economy's structure, business cycle, and economic policy.

Question 2

The questions with which Chapter 16 is concerned include each of the following except&#10;A) how has the structure of economic theory changed over the course of the past century?&#10;B) what are future prospects for successful management of the business cycle?&#10;C) how has economic policy changed over the past century?&#10;D) why does unemployment in Europe remain so high?

Accepted Answer

how has the structure of economic theory changed over the course of the past century?&#10;

Question 3

The questions with which Chapter 16 is concerned include each of the following except&#10;A) why has growth in Japan been so slow for the past decade and a half?&#10;B) how has the business cycle changed over the past century?&#10;C) why does inflation in the United States remain so high?&#10;D) why does unemployment in Europe remain so high?

Accepted Answer

Chapter 16 typically does not address current inflation rates in specific countries like the United States, but rather focuses on broader economic issues such as growth, business cycles, and unemployment, which can include discussions on Japan and Europe as mentioned in the other options.

Question 4

Between the year 1100 and the start of the United States Civil War in 1860 the share of the labor force engaged in agriculture&#10;A) increased from about 50 percent to about 80 percent.&#10;B) decreased from about 50 percent to about 2 percent.&#10;C) decreased from about 80 percent to about 50 percent.&#10;D) decreased from about 60 percent to about 25 percent.

Accepted Answer

Between 1100 and 1860, the share of the labor force engaged in agriculture decreased from about 80 percent to about 50 percent due to industrialization and urbanization.

Question 5

Between the United States Civil War in the 1860s and the end of the twentieth century the share of the U.S. labor force engaged in agriculture&#10;A) increased from about 50 percent to about 80 percent.&#10;B) decreased from about 50 percent to about 2 percent.&#10;C) decreased from about 80 percent to about 50 percent.&#10;D) decreased from about 60 percent to about 25 percent.

Accepted Answer

The share of the U.S. labor force engaged in agriculture significantly decreased from about 50 percent in the 1860s to about 2 percent by the end of the twentieth century, due to technological advancements, urbanization, and shifts in the economy towards industrial and service sectors.

Question 6

During the twentieth century, the share of the U.S. labor force engaged in mining, manufacturing, and construction&#10;A) decreased from about 40 percent to about 25 percent.&#10;B) decreased from about 55 percent to about 40 percent.&#10;C) increased from about 25 percent to about 40 percent.&#10;D) increased from about 20 percent to about 45 percent.

Accepted Answer

The share of the U.S. labor force engaged in mining, manufacturing, and construction decreased over the twentieth century, reflecting the shift towards a service-oriented economy.

Question 7

Each of the following is a fact of the U.S. economy one hundred years ago except&#10;A) the government's social insurance state was barely in embryo.&#10;B) the tax system was not at all progressive.&#10;C) every person had easy access to all occupations.&#10;D) most households found it very difficult to borrow.

Accepted Answer

One hundred years ago, not every person had easy access to all occupations due to various barriers such as racial, gender, and class discrimination. Options A, B, and D accurately reflect aspects of the U.S. economy at that time.

Question 8

The automatic stabilizers which have been developed in the last 100 years to help dampen the business cycle include each of the following except&#10;A) deposit insurance.&#10;B) progressive income tax.&#10;C) unemployment insurance.&#10;D) guaranteed minimum income.

Accepted Answer

Guaranteed minimum income is not considered an automatic stabilizer developed in the last 100 years to help dampen the business cycle. Automatic stabilizers like deposit insurance, progressive income tax, and unemployment insurance work by automatically adjusting to changes in economic conditions without the need for new government action, thereby helping to stabilize the economy. Guaranteed minimum income, while it can have stabilizing effects, is not traditionally categorized with these mechanisms and has not been widely implemented or recognized as an automatic stabilizer in the same way.

Question 9

In the late nineteenth century, the bulk of the improvements in labor productivity&#10;A) came from capital deepening: the building up of the infrastructure and the factories of the country.&#10;B) came from improvements in the efficiency of labor.&#10;C) came from labor deepening: the building up of the infrastructure and the factories of the country.&#10;D) came from labor working longer hours.

Accepted Answer

The late nineteenth century saw significant advancements in labor productivity primarily due to capital deepening, which involves the enhancement of a country's infrastructure and the expansion of its factories. This process allowed for more efficient production methods and the better utilization of labor, leading to increased productivity.

Question 10

In the twentieth century, the bulk of the improvements in labor productivity&#10;A) came from capital deepening: the building up of the infrastructure and the factories of the country.&#10;B) came from improvements in the efficiency of labor.&#10;C) came from labor deepening: the building up of the infrastructure and the factories of the country.&#10;D) came from labor working longer hours.

Accepted Answer

Improvements in labor productivity in the twentieth century were primarily due to enhancements in the efficiency of labor, including better methods, technologies, and processes, rather than simply increasing the amount of capital or labor hours.

Question 11

In the twentieth century,&#10;A) the improvements in capital deepening came from inventions and innovations in materials production, materials building, and organization.&#10;B) the improvements in the efficiency of labor came from capital deepening.&#10;C) the improvements in the efficiency of labor came from inventions and innovations in materials production, materials building, and organization.&#10;D) the improvements in the efficiency of labor came from working shorter hours.

Accepted Answer

The answer of In the twentieth century,&#10;A) the improvements in...

Question 12

Changes that will transform the macroeconomy in the future include each of the following except&#10;A) continued increase in financial flexibility that allows consumers to borrow more on less collateral.&#10;B) less need for productivity increases in agriculture and manufacturing.&#10;C) continued increase in financial flexibility which will make interpretation of financial markets more . difficult and is thus likely to make monetary policy somewhat more difficult to conduct.&#10;D) continued expansion in international trade.

Accepted Answer

The answer of Changes that will transform the macroeconomy in...

Question 13

Changes that will transform the macroeconomy in the future include each of the following except&#10;A) continued increase in financial flexibility that allows consumers to borrow more on less collateral.&#10;B) international investments will become easier to make.&#10;C) the speed with which capital flows across national borders will decrease.&#10;D) continued expansion in international trade.

Accepted Answer

The answer of Changes that will transform the macroeconomy in...

Question 14

Changes that will transform the macroeconomy in the future include each of the following except&#10;A) labor markets are likely to continue to change.&#10;B) international investments will become easier to make.&#10;C) the speed with which capital flows across national borders will increase.&#10;D) the importance of international trade will decrease.

Accepted Answer

The answer of Changes that will transform the macroeconomy in...

Question 15

If liquidity constraints - the inability to borrow - continue to decrease for households,&#10;A) the marginal propensity to consume will decrease.&#10;B) the marginal propensity to consume will increase.&#10;C) the marginal propensity to consume will not be affected.&#10;D) the marginal propensity to save will decrease.

Accepted Answer

The answer of If liquidity constraints - the inability to...

Question 16

If liquidity constraints - the inability to borrow - begins to increase for households,&#10;A) the marginal propensity to consume is likely to decrease.&#10;B) the marginal propensity to consume is likely to increase.&#10;C) the interest sensitivity of investment is likely to increase.&#10;D) the marginal propensity to consume will not be affected.

Accepted Answer

The answer of If liquidity constraints - the inability to...

Question 17

If international trade continues to increase,&#10;A) the marginal propensity to expend will increase.&#10;B) the marginal propensity to expend will decrease.&#10;C) the marginal propensity to expend will not be affected.&#10;D) the marginal propensity to export will decrease.

Accepted Answer

The answer of If international trade continues to increase,&#10;A) the...

Question 18

If liquidity constraints - the inability to borrow - continue to decrease for households,&#10;A) the multiplier is likely to get larger.&#10;B) the exchange rate sensitivity of exports will increase.&#10;C) the interest sensitivity of investment will increase.&#10;D) the multiplier is likely to get smaller.

Accepted Answer

The answer of If liquidity constraints - the inability to...

Question 19

If international trade continues to increase,&#10;A) the multiplier is likely to get smaller.&#10;B) the exchange rate sensitivity of exports will increase.&#10;C) the marginal propensity to export will increase.&#10;D) the multiplier is likely to get larger.

Accepted Answer

The answer of If international trade continues to increase,&#10;A) the...

Question 20

If liquidity constraints - the inability to borrow - start to increase for households,&#10;A) the multiplier is likely to get larger.&#10;B) the exchange rate sensitivity of exports will increase.&#10;C) the interest sensitivity of investment will increase.&#10;D) the multiplier is likely to get smaller.

Accepted Answer

The answer of If liquidity constraints - the inability to...

Question 21

If international trade starts to decrease,&#10;A) the multiplier is likely to get smaller.&#10;B) the exchange rate sensitivity of exports will increase.&#10;C) the marginal propensity to export will increase.&#10;D) the multiplier is likely to get larger.

Accepted Answer

The answer of If international trade starts to decrease,&#10;A) the...

Question 22

If international trade continues to increase,&#10;A) the domestic economy will become less vulnerable to foreign shocks.&#10;B) the exchange rate sensitivity of exports will increase.&#10;C) the domestic economy will become more vulnerable to foreign shocks.&#10;D) the multiplier is likely to get larger.

Accepted Answer

The answer of If international trade continues to increase,&#10;A) the...

Question 23

U.S. merchandise imports&#10;A) have doubled as a share of total goods production since 1960.&#10;B) have quadrupled as a share of total goods production since 1960.&#10;C) have doubled as a share of total goods production since 1900.&#10;D) have tripled as a share of total goods production since 1900.

Accepted Answer

The answer of U.S. merchandise imports&#10;A) have doubled as a...

Question 24

The increase in financial flexibility that will continue to occur&#10;A) means that changes in the supply of Treasury bills will have less of an effect on interest rates than they do today.&#10;B) means that changes in the supply of Treasury bills will have more of an effect on interest rates than they do today.&#10;C) is likely to make monetary policy more effective in the future.&#10;D) is likely to make fiscal policy more effective in the future.

Accepted Answer

The answer of The increase in financial flexibility that will...

Question 25

Improvements in information technology&#10;A) will make it more difficult for firms to control their inventories.&#10;B) will make it more difficult for firms to determine whether a proposed project will be profitable.&#10;C) will improve businesses' ability to control their inventories.&#10;D) will enhance businesses' ability to control their workers.

Accepted Answer

The answer of Improvements in information technology&#10;A) will make it...

Question 26

Unanticipated large-scale inventory accumulation or drawdowns&#10;A) have been a minor source of fluctuations in employment and output over the past century.&#10;B) have been a principal cause of inflation over the past century.&#10;C) have been a principal cause of interest rate movements over the past century.&#10;D) have been a principal source of fluctuations in employment and output over the past century.

Accepted Answer

The answer of Unanticipated large-scale inventory accumulation or drawdowns&#10;A) have...

Question 27

Data indicate that the U.S. economy prior to World War I&#10;A) experienced recessions that were much longer in length than post-World War II recessions.&#10;B) experienced expansions that were much longer in length than post-War II expansions.&#10;C) experienced recessions that were almost exactly the same length as post-World War II recessions.&#10;D) experienced recessions that were much shorter in length than post-World War II recessions.

Accepted Answer

The answer of Data indicate that the U.S. economy prior...

Question 28

Data indicate that the U.S. economy prior to World War I&#10;A) experienced recessions that were much longer in length than post-World War II recessions.&#10;B) experienced expansions that were much shorter in length than post-War II expansions.&#10;C) experienced expansions that were almost exactly the same length as post-World War II expansions.&#10;D) experienced expansions that were much longer in length than post-World War II expansions.

Accepted Answer

The answer of Data indicate that the U.S. economy prior...

Question 29

In the post-World War II era&#10;A) the business cycle has been about 25 to 30 percent smaller than prior to World War I.&#10;B) the business cycle has been about 25 to 30 percent larger than prior to World War I.&#10;C) inflation has been less of a problem than prior to World War I.&#10;D) borrowing by households has decreased from what it was prior to World War I.

Accepted Answer

The answer of In the post-World War II era&#10;A) the...

Question 30

Prior to World War I&#10;A) fiscal policy was the major stabilization policy in the United States.&#10;B) monetary policy was the major stabilization policy in the United States.&#10;C) neither fiscal nor monetary policy were feasible as stabilization policy in the United States.&#10;D) fiscal and monetary policy worked together to be effective stabilization policies in the United States.

Accepted Answer

The answer of Prior to World War I&#10;A) fiscal policy...

Question 31

Before World War II&#10;A) &#34;fiscal policy&#34; consisted of attempting to balance the budget at the full-employment output level.&#10;B) &#34;fiscal policy&#34; consisted of attempting to balance the budget at every output level.&#10;C) &#34;monetary policy&#34; consisted of attempting to balance the budget at the full-employment output level.&#10;D) &#34;monetary policy&#34; consisted of attempting to balance the budget at every output level.

Accepted Answer

The answer of Before World War II&#10;A) &#34;fiscal policy&#34; consisted...

Question 32

The pre-World War II boom-and-bust business cycle was driven by&#10;A) economic policies that allowed rises in inflation, followed by a Federal Reserve-caused recession to reverse the rise in inflation.&#10;B) economic policies that allowed unemployment to rise, followed by expansionary fiscal and monetary policies to reverse the rise in unemployment.&#10;C) consumers' swings from optimism to pessimism and back again.&#10;D) investors' swings from optimism to pessimism and back again.

Accepted Answer

The answer of The pre-World War II boom-and-bust business cycle...

Question 33

The post-World War II boom-and-bust business cycle has been driven by&#10;A) economic policies that allowed rises in inflation, followed by a Federal Reserve-caused recession to reverse the rise in inflation.&#10;B) economic policies that allowed unemployment to rise, followed by expansionary fiscal and monetary policies to reverse the rise in unemployment.&#10;C) consumers' swings from optimism to pessimism and back again.&#10;D) investors' swings from optimism to pessimism and back again.

Accepted Answer

The answer of The post-World War II boom-and-bust business cycle...

Question 34

Each of the following is a fact about the Great Depression except&#10;A) from full employment in 1929, real GDP fell until it was nearly 40 percent below potential output by 1933.&#10;B) consumption spending collapsed: by 1932 real consumption spending was less than one-ninth of what it had been three years before.&#10;C) unemployment had reached a quarter of the labor force by 1933.&#10;D) investment spending collapsed: by 1932 real investment spending was less than one-ninth of what it had been three years before.

Accepted Answer