America's Great Depression Chapter 3

9 Questions | Total Attempts: 179

SettingsSettingsSettings
Please wait...
Great Depression Quizzes & Trivia

This is a 10-question quiz on Chapter 3: Some Alternative Explanations of Depression: A Critique from America's Great Depression by Murray Rothbard.


Questions and Answers
  • 1. 
    Which of the following are not a common explanation of depression as set forth by Rothbard.
    • A. 

      Overproduction

    • B. 

      Underproduction

    • C. 

      Underconsumption

    • D. 

      Dearth of Investment opportunities

  • 2. 
    What is the contraction-causing factor that logic dictates lies beneath overproduction theory and which the theory cannot explain?
    • A. 

      Aggregate demand

    • B. 

      Variable interest rates

    • C. 

      Cost-price differentials

    • D. 

      Consumer good inflation

  • 3. 
    Which of the following is not a potential explanation for an underconsumption scenario?
    • A. 

      Too high a proportion of income going to lower income groups

    • B. 

      Too much investment

    • C. 

      Too much production

    • D. 

      Too high a proportion of income going to upper income groups

  • 4. 
    The _________ principle is how underconsumptionists try toexplain the problem of greater fluctuation in the producers’ thanthe consumer goods’ industries.
  • 5. 
    What essential determinant of savings and investment does Hansen's stagnation theory omit?
    • A. 

      Interest rates

    • B. 

      Money supply

    • C. 

      Time preferences

    • D. 

      Wage rates

  • 6. 
    How many separate but interacting economic cycles does Schumpeter postulate?
    • A. 

      Zero

    • B. 

      One

    • C. 

      Two

    • D. 

      Three

  • 7. 
    Why does Rothbard consider consumer loans to be less problematic than other forms of loans?
    • A. 

      They are smaller in the aggregate than business financing.

    • B. 

      They do not create a boom-bust cycle.

    • C. 

      They will evaporate when consumers go bankrupt.

    • D. 

      They increase consumer spending and therefore economic growth.

  • 8. 
    Why does Rothbard reject the notion that consumer confidence is a cause of business cycles?
    • A. 

      It is derivative, not causal.

    • B. 

      Consumption is only one part of GDP.

    • C. 

      Business confidence is the actual cause.

    • D. 

      He does not believe in psychology.

  • 9. 
    What is the fundamental flaw in blaming the current crisis on the housing market?
    • A. 

      The housing crisis was caused by the Democrats.

    • B. 

      Overproduction is caused by the construction industry.

    • C. 

      It confuses a business fluctuation with the business cycle.

    • D. 

      Housing is an investment good, not a consumer good.