Economics 1740 VERSION A - MARK ON YOUR SCANTRON ANSWER SHEET
Fall, 2002
Dr. Alston , Quiz #13, Walton and Rockoff, Chapters 25 & 26
1.In 1940, federal government purchases of goods and services equaled roughly _____ of GDP; by 1943, this figure had risen to ______.
a.20 percent; 30 percent
- 8 percent; 50 percent
- 15 percent; 20 percent
- 1 percent; 25 percent
2. The draft is analogous to a tax, where the amount of the tax equals the
a.discounted present value of the soldier’s lost private sector income.
b.estimated value of a human life.
c.difference between what a soldier would need to be paid to serve voluntarily and his actual pay.
d.soldier’s earnings while enlisted.
3.Economists such as James Tobin and Paul Samuelson claimed that ______provided solid evidence of the effectiveness of Keynesian policies.
a.increases in deficit spending accompanied by extremely low unemployment during WWII
b.increases in taxes accompanied by rising federal budget surpluses
c.increases in the money supply accompanied by falling interest rates
d.price controls accompanied by inflation
4.According to Robert Higgs,
a.World War II was a period of unique prosperity.
b.World War II was a period of continued depression that did not end until after the war.
c.measures of GDP during World War II are understated.
d.civilian consumption of most items actually rose during World War II.
5.Which of the following is most accurate about women’s involvement in the labor force?
a.Over half of the women who entered the labor force between 1940 and 1944 had dropped out by 1950.
b.Between 1940 and 1950 the number of women employed in the labor force dropped.
c.After World War II, the supply of young married women available to work increased.
d.Women made their largest gains in employment in the service and agricultural sectors.
6.Between 1940 and 1990, total government spending as a percentage of GDP doubled. The primary source of this growth in spending was increases in
a.military expenditures.
b.government purchases of goods and services.
c.transfer payments.
d.the number of federal employees relative to the total labor force.
7.During the three decades immediately following World War II,
a.conservative forces successfully blocked any expansion of New Deal-type programs.
b.the prevailing liberal ideology led to the passage of legislation that increased Social Security benefits, created Medicare, and increased the minimum wage.
c.disillusionment with government led to deregulation of airlines and other industries.
d.most policy makers and the general public rejected Keynesian policies.
8.Features of “Reagonomics” include all of the following except
a.reduction in marginal tax rates.
b.increased government expenditures for defense.
c.deregulation of business.
d.regular increases in the minimum wage.
9.According to Arthur Schlesinger, Jr., government spending
a.may grow more slowly during conservative periods, but will never contract.
b.follows a natural cycle of increases during liberal periods and decreases during conservative periods.
c.grows at the same rate under both liberal and conservative leadership; only the distribution (defense v. civilian) of the spending changes.
d.reflects attempts by political leaders to reject the dominant political ideology of their youth.
10. In the 1960s and 1970s the United States passed several major consumer safety laws, including the Flammable Fabrics Act and the Child Protection Act. The economic impact of such legislation may include all of the following except
a.reducing the price of the regulated product.
b.increasing the cost of producing the regulated product.
c.reducing the supply of the regulated product.
d.reducing competition within the regulated industry.
ANSWERS: Quiz No. 13, Econ 1740 Fall, 2002, Walton and Rockoff, Chapters 25 & 26, Version A
1. ANSWER: b. 8 percent; 50 percent
2. ANSWER: c. the difference between what a soldier would need to be paid to serve voluntarily and his actual pay.
3. ANSWER: a. increases in deficit spending accompanied by extremely low unemployment during WWII
4. ANSWER: b. World War II was a period of continued depression that did not end until after the war.
5. ANSWER: a. Over half of the women who entered the labor force during World War II had dropped out by 1950.
6. ANSWER: c. transfer payments.
7. ANSWER: b. the prevailing liberal ideology led to the passage of legislation that increased Social Security benefits, created Medicare, and increased the minimum wage.
8. ANSWER: d. regular increases in the minimum wage.
9. ANSWER: a. may grow more slowly during conservative periods, but will never contract.
10. ANSWER: a. reducing the price of the regulated product.
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