ECON 1100 – Global Economics (Section 01) Exam #3 – 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: a. the tremendous increase in industrial capacity throughout all European countries, resulting from military production during the war. b. the economic prosperity that much of the world experienced during the 1920’s. c. prestige of and respect for the Soviet system of central planning. d. All of the above answers are correct. 2. Nationalization refers to a. intense patriotic devotion and loyalty to one’s own country. 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. c. the sale of a government owned enterprise by the national government to members of the general public. d. the study of the performance of the national economy, with particular focus on policies that governments can use to improve their performance. 3. ____________________ relied primarily upon free market institutions, but with a significant “social safety net.” a. The German Social Market Economy b. Soviet Five Year Plans for Industry c. “Planification” d. The Great Depression 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. b. gruel. c. dog food. d. wheat. 5. The “General Agreement on Tariffs and Trade” a. was initially signed in 1939 by 8 countries, all European. b. was initially signed in 1947 by 23 countries, geographically from all reaches of the globe. c. provided mechanisms for negotiating multilateral reductions in tariffs. d. More than one of the above answers is correct.6. “Planification” a. was implemented in the Soviet Union following the end of World War II. b. refers to the French notion of Indicative Planning. c. was an extreme form of Socialism, in which virtually no economic decisions would be made in “free markets.” d. More than one of the above answers is correct. 7. During the 1970’s the British economy experienced a. an inflation rate and an unemployment rate both near 0%. b. a high inflation rate, but an unemployment rate near 0%. c. an inflation rate near 0%, but a high unemployment rate. d. a high inflation rate and a rising unemployment rate. 8. Friedrich von Hayek a. developed the ideas which were the foundations for Keynesianism. b. was a strong advocate of free-market capitalism. c. was elected Prime Minister of Great Britain immediately after WW-II, in a landslide victory over Winston Churchill. d. More than one of the above answers is correct. 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. b. the managers of the privatized enterprises would be “more popular,” since they would run the enterprises more efficiently and effectively than government bureaucrats had run the enterprises. c. the government would be less likely to run a budget deficit, since a great deal of revenues would be generated by the sale of privatized enterprises. d. None of the above answers is correct. 10. From the middle of 1921 through the middle of 1929, the U.S. economy experienced a. the highest inflation rates ever experienced in the history of the U.S. b. very low inflation rates, but historically high levels of unemployment. c. a steady increase in the value of the Dow Jones Industrial Average. d. None of the above answers are correct. 11. The “National Recovery Administration” a. was declared Unconstitutional by the Supreme Court in 1935. b. was an attempt at “Indicative Planning” in the U.S. c. allowed industries to create “codes of fair competition,” intended to reduce destructive competition between firms, establish minimum wages for workers, and maximum weekly hours for workers. 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? a. The burdensome and highly progressive tax structure. b. The presence of a substantial “Social Safety Net.” c. Good labor relations, under which wages and working conditions were considered “fair” by both workers and employees, leading workers to be highly productive. d. The tremendous amount of resources devoted to inefficient and economically declining nationalized industries. 13. A “Price Ceiling” a. is a maximum legal price at which trade can take place. b. is a minimum legal price at which trade can take place. c. will always make all sellers in a market better off. d. More than one of the above answers is correct. 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 b. Franklin Roosevelt c. John F. Kennedy d. Richard Nixon 15. Which of the following government agencies was NOT created as part of the “New Deal”? a. The Federal Communications Commission. b. The Interstate Commerce Commission. c. The National Labor Relations Board. d. The Civil Aeronautics Authority. 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. b. The election of Jimmy Carter in 1976, and the subsequent transfer of power from Ford to Carter. c. The highly progressive income tax structure that was in place before Ronald Reagan took office. d. More than one of the above answers is correct. 17. __________ refers to a situation where government revenues are greater than government spending. a. A Deadweight-Loss b. A deficit c. A surplus d. An inefficiency18. During the time when Margaret Thatcher was in office, Britain experienced a. negative economic growth, along with a decrease in income inequality. b. negative economic growth, along with an increase in income inequality. c. positive economic growth, along with an increase in income inequality. d. positive
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