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
Correct Answer
B. Underproduction -
- 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
Correct Answer
C. Cost-price differentials -
- 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
Correct Answer
A. Too high a proportion of income going to lower income groups -
- 4.
The _________ principle is how underconsumptionists try toexplain the problem of greater fluctuation in the producers’ thanthe consumer goods’ industries.
Correct Answer
acceleration - 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
Correct Answer
C. Time preferences -
- 6.
How many separate but interacting economic cycles does Schumpeter postulate?
- A.
Zero
- B.
One
- C.
Two
- D.
Three
Correct Answer
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.
Correct Answer
B. They do not create a boom-bust cycle. -
- 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.
Correct Answer
A. It is derivative, not causal. -
- 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.
Correct Answer
C. It confuses a business fluctuation with the business cycle. -
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Mar 21, 2022Quiz Edited by
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Nov 22, 2008Quiz Created by
Voxday
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