Download Homework #4

ECO 473 – Money & Banking
Dr. D. Foster – Fall 2016
Homework #4 Take-home Quiz
25 true/false. [You may work together with a group.] This quiz is worth 15 pts.
1. Grant writes that he considers the price mechanism to be his “hero.”
2. While there is some difference of opinion about whether the decline of 1920-1921 can be called a
“depression” the New York Federal Reserve refers to it that way.
3. President Cleveland expressed a common view in our earlier political history that the government
should not support the people.
4. Grant tells the story of how Richard Nixon, a future president of the U.S., ran a men’s store in
Kansas City.
5. Prices had been falling in the late 1800s, Grant points out, due to the constant decline in the money
supply.
6. The Federal Reserve Act passed in 1913 did not include a requirement for the Fed to either maintain
price stability nor to promote full employment.
7. Until the outbreak of World War I, the New York Stock Exchange had only closed down twice in its
then-122 year history.
8. As Grant notes, Benjamin Strong was an ardent advocate of a highly diversified Federal Reserve
System with many individual Federal Reserve Banks.
9. To help conserve valuable resources for the war effort (WWI), Herbert Hoover promoted “meatless
Mondays.”
10. When President Wilson had his stroke, the press was clamoring for the Vice President to take over
Wilson’s presidential duties.
11. There are 49 Federal Reserve District Banks, one in every state except for Alaska.
12. The European Central Bank has replaced many individual country’s central banks, including France,
Germany, England and Japan.
13. According to Rothbard, free banking is likely to be quite inflationary.
14. According to Rothbard, even if a central bank is on the gold standard it cannot go bankrupt.
15. According to Rothbard, the creation of the FDIC to insure depositor’s funds has made banks less
cautious about increasing credit.
16. According to Rothbard, the more layers there are in the banking system the more the money
supply can be expanded.
17. The Peel Act (1844) failed to stem inflationary pressure from banks because it ignored the fact that
demand deposits were also money.
18. State chartered banks were strong vocal opponents of the re-chartering of the First Bank of the
U.S.
19. According to Rothbard, President Van Buren set up the Independent Treasury System to mute
criticism of U.S. Treasury deposits held at “pet” banks.
20. According to Rothbard, the Federal Reserve Act of 1913 was, in large part, precipitated by the Bank
Panic of 1907.
21. Although there is no specific “founder” of macroeconomics, John Maynard Keynes is usually
associated as the first with theories to describe the overall economy.
22. The largest component of GDP is government spending.
23. Unemployment that is temporary and due to ups and downs in the business cycle is referred to as
structural unemployment.
24. The price index measure that best reflects the situation faced by clerical workers is CPI-W.
25. The chained CPI changes the weights for different items in the market basket every month..
Name(s):
ECO 473 – Money & Banking
Dr. D. Foster – Fall 2016
Homework #4 – Take-home T/F Quiz [This may be a group assignment.]
Please use the following to record your answers:
1
6
11
16
21
2
7
12
17
22
3
8
13
18
23
4
9
14
19
24
5
10
15
20
25
Score
Total:
=
Reaction essay (100-125 words) over the Grant reading (C1-C4):
Provide a word count =
Name:
Homework #4 – 2 multiple choice questions. 2 over Grant readings:
[Each question must have 5 answer choices, a-e. Asterisk the answer you intend as the correct choice.]
These differ depending on the section you are in!!
From Grant – Chapter 1 (section #1) or Chapter 2 (section #2):
1.
a.
b.
c.
d.
e.
From Grant – Chapter 3 (section #1) or Chapter 4 (section #2):
2.
a.
b.
c.
d.
e.