48. To stop the outflow of gold from the U.S., the Federal Reserve would: a. rai

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48. To stop the outflow of gold from the U.S., the Federal Reserve would: a. raise the prime rate of interest. b. lower the discount rate of interest. c. keep the 30 year mortgage rate of interest constant and steady. d. inflate our money supply. e. None of the above. 49. Before affecting the United States, the Great Depression started in: a. Southeast Asia. b. Germany and Poland. c. Brazil and Argentina. d. Canada. e. All of the above. 50. From December 1932 through March 1933, the economy worsened as shown by these statistics: a. manufacturing production was down almost 20%. b. unemployment was down to about 15%. c. the money supply was growing about 10%. d. All of the above. e. None of the above. 51. From 1930 to 1940, net investment (gross investment minus depreciation) changed by: a. +$300 b. b. +$200 b. c. +$100 b. d. +$10 b. e. -$3 b. 52. The NRA lasted until May of 1935 because: a. it had served its purpose and was no longer needed. b. the Congress refused to reauthorize its budget. c. the President fired the director and closed it down. d. the Supreme Court ruled it unconstitutional. e. 90% of the top management were indicted on charges of criminal conspiracy. 53. What is the correct order of passage of the following six Congressional acts from earliest date to latest date? [Except for these two, you should know what the acronyms stand for: EBA = Emergency Banking Act; WA = Wagner Act.] a. AAA EBA FERA NRA RFC WA b. EBA NRA RFC AAA WA FERA c. RFC AAA NRA EBA FERA WA d. NRA WA RFC FERA EBA AAA e. FERA EBA AAA NRA WA RFC 54. The Austrian view of the business cycle holds that: a. the actions of the central bank are the cause of our recessions. b. underconsumption is primary cause of recessions. c. recessions will worsen over time. d. recessions are mostly felt in the retail sector of the economy. e. we need government to stabilize the economy. 55. According to the Austrian argument, a coherent theory of the business cycle must explain: a. why cycles are repetitive. b. why there is a “cluster” of entrepreneurial errors leading to a recession. c. why the recession most intense in the service sector of the economy. d. All of the above. e. Only A and B of the above. 56. According to the Austrian business cycle theory which of the following is true about the economy? a. The fact that there is widespread business failure does not mesh with our understanding of how markets work. b. The broad disturbance in our economy points to a monetary cause. c. It is long-term capital investments that suffer the most. d. All of the above. e. None of the above. 57. This economist won a Nobel prize in economics for his work on business cycle theory: a. Murray Rothbard. b. F. A. Hayek. c. J. M. Keynes. d. Ludwig von Mises. e. Karl Marx. 58. According to the Austrian view, the boom-bust problem originates with: a. low interest rates during the bust. b. low interest rates during the boom. c. high interest rates during the boom. d. high interest rates during the bust. e. high interest rates during both the boom and the bust.

Explanation / Answer

48. To stop the outflow of gold from the U.S., the Federal Reserve would inflate our money supply.

Option d

49. Before affecting the United States, the Great Depression started in Southeast Asia, Germany, Poland, Brazil, Argentina, Canada.

Option e

50. From December 1932 through March 1933, the economy worsened as shown by these statistics

Option a - manufacturing production was down almost 20%.

51. From 1930 to 1940, net investment (gross investment minus depreciation) changed by  -$3 b.

Option e

52. The NRA lasted until May of 1935 because the Supreme Court ruled it unconstitutional.

Option d

Note: max. 4

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