America's Great Depression Chapter 4
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This is a 10-question quiz on Chapter 4: The Inflationary Factors from America's Great Depression by Murray Rothbard.
- 1.Why does Rothbard consider statistical facts to be methodologically defective for testing Austrian economic theory?
- A.
Statistical science is fundamentally unreliable.
- B.
Government statistics cannot be trusted due to political pressures.
- C.
Statistics cannot describe possible but unrealized events.
- D.
Keynesian economists who create the statistics are biased against Austrians.
- 2.Which of the following is NOT a component of the U.S. money supply?
- A.
Demand deposits
- B.
Time deposits
- C.
Life insurance surrender liabilities
- D.
Corporate equities
- 3.What was the average annual rate of increase in the money supply from 1921 to 1929?
- A.
2.5 percent
- B.
5.0 percent
- C.
7.7 percent
- D.
224 percent
- 4.What is the most important element in the money supply?
- A.
Commercial bank credit base.
- B.
Savings bank credit base.
- C.
Savings and loan association shares.
- D.
Life insurance liabilities.
- 5.Why was the relative expansion of time deposits compared to demand deposits an important inflationary factor in the 1920s?
- A.
Because money deposited in time deposits funded the increase in risky stock investments.
- B.
Because time deposits had a lower reserve requirement.
- C.
Because time deposits paid higher rates of interest.
- D.
Because time deposits could be used for investment leverage.
- 6.What is the preeminent controlled factor of increasing bank reserves?
- A.
New bills discounted by the Federal Reserve.
- B.
Treasury currency outstanding.
- C.
Federal Reserve assets purchased.
- D.
Treasury cash holdings.
- 7.What does Rothbard assert was the crucial difference between the deflationary periods X and XII prior to the Great Depression?
- A.
Time deposits fell by $70 million in XII
- B.
Demand deposits increased by $85 million in XII
- C.
Life insurance policies declined by 25 percent in X.
- D.
Gold prices increased 18 percent in XII
- 8.What is an acceptance?
- A.
A contract to pay when an equity price falls to an acceptable level.
- B.
A mortgage bank's agreement to a loan restructuring to avoid foreclosure.
- C.
A leveraged life insurance investment.
- D.
A bill sold by borrowers to dealers or banks who in turn sell the bills to the Federal Reserve System.
- 9._______ was one of the leading borrowers on the American market during the 1921-1929 boom.
- 10.Who was the individual primarily responsible for the Federal Reserve's policy of purchasing U.S. government securities?
- A.
John Maynard Keynes
- B.
Benjamin Strong
- C.
Adolph Miller
- D.
Alan Greenspan
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