America's Great Depression Chapter 3
This is a 10-question quiz on Chapter 3: Some Alternative Explanations of Depression: A Critique from America's Great Depression by Murray Rothbard.
- 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.
Questions: 10 | Attempts: 1526 | Last updated: Jun 23, 2019
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