ECON 1100 – Global Economics (Section 01) Exam #3 Answer Key – Fall 2007 (Version B) Multiple Choice Questions (212 points each): 1. The “mixed economy consensus” that emerged in Europe following World War II resulted from: c. prestige of and respect for the Soviet system of central planning. 2. Nationalization refers to b. the acquisition of ownership and control of a privately owned enterprise by the national government, either with or without compensation to the original owners. 3. ____________________ relied primarily upon free market institutions, but with a significant “social safety net.” a. The German Social Market Economy 4. Johannes Semler was replaced by Ludwig Erhard as the German Director of Economic Administration in the American/British Occupation Zone after referring to U.S. food aid to Germany as a. chicken feed. 5. The “General Agreement on Tariffs and Trade” d. More than one of the above answers is correct. 6. “Planification” b. refers to the French notion of Indicative Planning. 7. During the 1970’s the British economy experienced d. a high inflation rate and a rising unemployment rate. 8. Friedrich von Hayek b. was a strong advocate of free-market capitalism. 9. One of the arguments in favor of Privatization was that it would “create popular capitalism.” This meant that after Privatization a. a larger portion of the general public would have a direct ownership stake in private enterprises. 10. From the middle of 1921 through the middle of 1929, the U.S. economy experienced c. a steady increase in the value of the Dow Jones Industrial Average.11. The “National Recovery Administration” d. All of the above answers are correct. 12. Which of the following was NOT one of the four primary causes of Britain’s poor economic performance during the 1970’s? c. Good labor relations, under which wages and working conditions were considered “fair” by both workers and employees, leading workers to be highly productive. 13. A “Price Ceiling” a. is a maximum legal price at which trade can take place. 14. ________ was known as the “trust buster,” having launched anti-trust suits during his Presidential administration leading to the breakup of over 40 monopolies. a. Theodore Roosevelt 15. Which of the following government agencies was NOT created as part of the “New Deal”? b. The Interstate Commerce Commission. 16. Which of the following caused an “Oil Crisis” in the 1970’s? a. The Oil Embargo imposed by Arab members of OPEC during the Yom Kippur War. 17. __________ refers to a situation where government revenues are greater than government spending. c. A surplus 18. During the time when Margaret Thatcher was in office, Britain experienced c. positive economic growth, along with an increase in income inequality. 19. If a price floor of $7.50 were imposed in this market, then ______ units would be traded. d. 5,300 20. In comparison to the “free market outcome,” imposing a price ceiling of $3.00 would decrease Producers’ Surplus by b. area (c) plus area (g) 21. Deadweight-Loss would be equal to “area (f) plus area (g)” d. More than one of the above answers is correct. 22. The period of prosperity and economic expansion following World War II was known as the _____________ in Germany. b. “Economic Miracle”23. In response to the “price controls” put in place by the Nixon Administration d. More than one of the above answers is correct. 24. The overall role of government in most industrialized countries c. initially increased and subsequently decreased throughout the course of the twentieth century. 25. The “Commanding Heights” of an economy a. consists of those industries which provide goods/services that are essential for other industries to be productive. 26. _____________ is a system in which the government assumes the responsibility of improving the well-being of its citizens, particularly with regards to healthcare, education, employment, and social security. c. A Welfare State 27. John Maynard Keynes argued that: free markets are volatile and market forces might not always lead to “full employment”; such “low production equilibria” are often the result of “too little spending.” His solution was essentially to c. replace the missing private spending with public/government spending. 28. The _______________ established a “Common Market” in Europe, which could be described as an unprecedented joining of diverse economies, built in part upon the “mixed economy consensus.” a. Treaty of Rome 29. Which of the following was NOT a primary element of the policies which became known as “Thatcherism”? c. A comprehensive program of Nationalization, which allowed the government to acquire direct ownership/control of the “Commanding Heights” of the economy. 30. The “Securities and Exchange Commission” was created as part of the “New Deal,” with the primary task of a. regulating stock markets and restoring efficiency to financial markets. 31. The ideas of Keynesianism a. began to be applied in practice in the U.S. before the start of WW-II, and continued to be used in the decades immediately following WW-II. 32. Economists c. disagree on the impact of the policies known as the “New Deal” in getting the U.S. out of the Great Depression. 33. “Full Employment” can be described as a situation in which c. every person in the labor force who wants work is able to find a job.34. _____________ created a plan that “shook the French economy out of its stalemate and propelled it into the modern age.” b. Jean Monnet 35. Which of the following was NOT a proper task of government in the opinion of Margaret Thatcher? c. Increasing the bargaining power of unions, so that workers are guaranteed a “fair wage.” 36. The automotive company “British Rover” was privatized through a “negotiated sale.” This technique of privatization is one in which c. the entire enterprise is sold to a single buyer, at terms agreed upon by the buyer and the government. 37. “Fabians” a. were British Socialist who sought to replace the “scramble for private gain” with “collective welfare.” 38. “Black Tuesday” refers to a. October 29, 1929 – the day that the Dow Jones Industrial Average lost 11.73% of its value as part of the “Stock
View Full Document
Unlocking...