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Macroeconomics (Chp.1,2,3) Exam 1

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stlwalk's version from 2017-09-25 20:34

Section 1

Question Answer
1. How old is economics?Over 200 years-1776-Scottish author Adam Smith wrote "The Wealth of Nations": first treatment of economic issues as a topic separable from philosophy in general.
2. How old is macroeconomics?About 75 years old-1936-British author J.M. Keynes published "The General Theory of Employment, Interest, and Money" during Great Depression
3. Western European Feudalism: Could peasant families be pushed off the land?No. Western Europe tradition granted peasants rights to land, the house on it and gardens and fields.
4. Western European Feudalism: Did manor lords order peasants around?No. Both classes followed tradition (the way it had always been done) by doing what the generation before had done.
5. Feudalism: Did you worry about finding a job or training?No. Peasant parents and found jobs and marriages for their children.
6. Why did the Northern U.S. colonies fail to establish the feudal system?Because labor was valued over land (it was the opposite in Europe). There was scarce labor but abundant land. No acknowledgement of legal land titles, whoever worked the land owned it.
7. Industrialism vs. Feudalism: Did French peasants in 1400s or 1830s have better income?1400s. Black Plague made labor scarce and land per person went up which meant food per person went up.
8. Social Security System created?1935-Social Security and Unemployment Insurance founded. (federal, congress)
9. Nationwide Unemployment Insurance System created?1935-Social Security and Unemployment Insurance founded. (federal, congress)
10. How many pages was the original legislative bill for the Social Security and Unemployment Insurance Systems?About 26 pages. <30 pages
11. What portion of US banks failed from 1930-1933?1/3 of all banks failed.
12. Before 1933, when a bank failed, what happened to the funds?All or most was lost. "Bankrupt" meant that the bank owed more to those with money in their bank than they had in total assets.
X #13
14. What was the unemployment rate in the USA in 1933?About 25% (in deepest part of Great Depression)
X #15
16. What was the USA's economic period from approx. 1929-1940 called?The Great Depression (actually specifically 1930-33 but the economy was failing from the 1930s to the 1940s.)
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Section 2

Question Answer
The Great Depression refers to a period:in the 1930s in which the unemployment rate was more than 10% for five years
Which of the following did not exist before 1929?Mandatory Federal Deposit Insurance (FDIC), mandatory unemployment insurance, efforts to affect unemployment with taxes, government spending, and central bank manipulation of interest rates.
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Section 3

Question Answer
Frictional unemploymentThere are as many employers with job vacancies as there are unemployed people.
Structural unemploymentThe tax laws are simplified to have no exceptions, and highly paid tax lawyers are laid off their jobs. Most of them keep looking for jobs as lawyers at equivalently high salaries, but these positions do not exist. (Additional obstacle beyond search time making it not frictional.)
Cyclical unemploymentSales and productions are lower in most of the U.S. and you are laid off your job because the business you work for is selling fewer products.
Frictional unemploymentYou work for a firm which makes turntables for phonograph record players, and you are laid off because compact disks are invented. You are willing and able to take a different sort of job even if its at a lower pay. (Worker flexibility implies that only a normal amount of search time occurs.)
GDP definitionThe total money value of all final goods and services produced in some location (usually a country) over some period of time (usually a year).
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