99.Which of the following is false?

a.During the depression of 1920-1921, the Federal Reserve district banks set their own interest rate policies, but they mostly followed the lead of the New York bank.

b.One reason why there was little government intervention in the economy during the depression of 1920-1921 was because President Wilson had suffered a stroke.

c.The Great Depression began with the stock market crash of 1929.

d.Before Hoover was president he had been the Secretary of Commerce under Presidents Harding and Coolidge.

e.The recovery of 1922 is generally referred to as the "phony recovery."

100.What did the government do in the wake of the 1920-1921 depression?

a.It balanced its budget.

b.It engaged in moderate amounts of fiscal stimulus spending.

c.It started many public works projects.

d.It grew in size by about 15% relative to the GDP.

e.All of the above.

101. The depression of 1920-1921 is referred to as the:

a. Wilson Depression.

b. Forgotten Depression.

c. Great Depression.

d. Harding Depression.

e. Gold Depression.

102. Why was the depression of 1920-1921 considered to be inevitable?

a. Inflation in consumer prices was greater than 10% for four years in a row.

b. The federal government's spending was falling dramatically at the end of WWI.

c. Unemployment was considered to be too low to be sustainable.

d. All of the above.

e. Only A and B of the above.

103. Why was the depression of 1920-1921 over so quickly? Among the reasons generally cited are that:

a. the Federal Reserve kept interest rates high until the threat of inflation ended.

b. President Wilson suffered a stroke and did not devote his energies toward the depression.

c. President Harding was of the opinion that the federal government should stay out of the way of the depression.

d. Congress reduced spending to balance its budget.

e. All of the above.

104. The idea that the recovery from the depression of 1920-1921 would require hard work, saving and forgoing needless spending was the view of:

a. President Harding.

b. President Wilson.

c. President Hoover.

d. President Coolidge.

e. President Roosevelt.

105. To deal with a depression we need to keep wages and prices from falling. This was the idea of:

a. President Harding.

b. President Hoover.

c. President Roosevelt.

d. All of the above.

e. Only B and C of the above.

106.Some of the outcomes of the 1920s following the depression paint a picture of a robust and growing economy, such as:

a.increased auto ownership.

b.increased electrification of the county.

c.increased income.

d. a stock market boom.

e.All of the above.

107. From 1927 to 1932 the Federal Reserve's monetary policy was:

a. extremely loose, keeping interest rates low.

b. extremely tight, keeping interest rates high.

c. extremely neutral, keeping interest rates constant.

d. extremely volatile, raising and lowering rates erratically.

e. to completely ignore interest rates in favor of controlling bank reserves.

108. In what ways can we say that the depression following the stock market crash of 1929 became a "great" depression?

a. The Congress passed very stringent tariffs that resulted in collapsing world trade.

b. The Congress raised taxes to fund growing federal government deficits.

c. President Hoover convinced business leaders to keep from cutting wages and prices.

d. The Federal Reserve embarked on an erratic policy of lowering, then raising, then lowering, then raising the discount rate of interest.

e. All of the above.

109.During the initial stages of the Great Depression, President Hoover convinced many American industrialists to:

a.raise production by at least 5% per year.

b.raise wages by at least 5% per year.

c.reduce wages by at least 10% per year.

d.All of the above.

e.None of the above.

110.Among the myths about the Great Depression is that:

a.capitalism failed.

b.markets worked quite well.

c. the New Deal did little to help the economy.

d.Herbert Hoover was actively using government to combat the depression.

e.All of the above.

111.The bank "holiday" was declared by FDR in his first days in office. The soundest banks in the twelve Federal Reserve cities opened back up in about:

a.two days.

b.one week.

c.one month.

d.two months.

e.three months.

112.Following the initiation of the bank holiday in 1933:

a.nearly two in five national banks failed to reopen.

b.most big city banks were closed for about sixty days.

c.bank depositors continued to withdraw their funds until late in 1935.

d.the crisis for the banking sector, for all intents, was over.

e.about 99% of all state chartered banks were able to reopen.

113. The banking crisis, which resulted in the failure of thousands of banks, was essentially over in:

a. 1929.

b. 1931.

c. 1933.

d. 1937.

e. 1939.

114. What were President Roosevelt's advisors called?

a. Franklin's Boys.

b. The Egg Heads.

c. The Brains Trust.

d. The Mad Men.

e. The X-Men.

115.In terms of President Roosevelt's economic policies in dealing with the depression, we can say that:

a.he drew his advisors primarily from the business world.

b.he had been a very well-schooled student of economics.

c.the government would become increasingly involved in industrial planning for the economy.

d.the administration was more focused on recovery from the depression than in reforming the system.

e.All of the above.

116.There was a mini-economic recovery in the second quarter of 1933, which we observe by noting:

a.significant increases in non-durable goods production.

b.significant increases in durable goods production.

c.declines in the unemployment rate.

d. All of the above.

e.Only A and C of the above.

117.Which of the following is/are true about the Agricultural Adjustment Administration?

a.It established minimum prices on many agricultural crops.

b.It killed off millions of pigs and cattle in order to keep prices high.

c.It generally transferred wealth from non- farmers to farmers.

d.It was struck down as unconstitutional by the Supreme Court.

e.All of the above.

118.The NRA lasted until May of 1935 because:

a.it had served its purpose and was no longer needed.

b.the Congress refused to reauthorize its budget.

c.the President fired the director and closed it down.

d.the Supreme Court ruled it unconstitutional.

e.90% of the top management were indicted on charges of criminal conspiracy.

119. When the Supreme Court ruled that the NRA and AAA were unconstitutional, President Roosevelt responded by:

a. proposing that additional justices be appointed to the court.

b. calling for the impeachment of the justices on the court.

c. firing all but one of the justices of the Supreme Court.

d. refusing to allocate any federal monies to fund the Supreme Court.

e. All of the above.

120.The depression of 1937-38:

a.saw unemployment back up to 20%.

b.occurred even through real GDP kept growing, albeit slowly.

c.was attributed, in part, to the Fed's reduction in the required reserve ratio.

d.All of the above.

e.None of the above.

121.From 1930 to 1940, net investment (gross investment minus depreciation) changed by:

a.+$300 b.

b.+$200 b.

c.+$100 b.

d.+$10 b.

e.-$3 b.

122. Instead of drifting back into a prolonged depression following the end of World War II, what happened from 1945 to 1947 that fueled American prosperity?

a. Millions of women left the labor force as millions of men re-entered.

b. Millions of non-manufacturing jobs were created as real wages fell.

c. Private sector investment boomed as government deficits shrank.

d. Exports grew, further stimulating American production.

e. All of the above.

123.Among the consequences of the Great Depression that are still with us today include:

a.an end to the gold standard.

b.an increase in the size of the federal government.

c.growth in the regulatory state.

d.the rise in the welfare state.

e. All of the above.

124.To restore "sound money" Rothbard argues that:

a.we need a combination of gold and silver to back up our currency.

b.the job of printing currency should be transferred to the U.S. Mint.

c. the Federal Reserve should be abolished.

d.FDIC premiums should be increased by between 50% and 100%.

e.All of the above.

125.The widespread failure of the financial system is known as:

a.systemic failure.

b.wholesale failure.

c.financial mania.

d.the "dollar doldrums."

e.the Fisher Folly.

126.An asset bubble can occur:

a.only in financial assets, like bonds.

b.only in real assets, like cotton.

c.only in money assets, like gold.

d.only in land and other natural resources.

e.None of the above.

127.The TV personality that questioned Bernanke's statement that the Fed wasn't printing money was:

a.Johnny Carson.

b.Bill Maher.

c.Conan O'Brien.

d.Jon Stewart.

e.Jay Leno.

128.According to Wallison, previous to Bear Stearns, how many other large nonbank firms had been rescued with a government bailout?

a.None.

b.One.

c.Two.

d.Three.

e.Fifteen.

129.According to Salerno, the government of Greece will be able to impose negative interest rates on people's deposits by:

a.requiring that old currency be exchanged for new currency at a discount.

b.imposing a fee on cash withdrawal from bank accounts.

c.hiding it in the income tax.

d.automatically shrinking these deposits by 0.25% per month.

e.eliminating all cash transactions.

130.Salerno maintains that the so-called "war on cash" in the United States began with the passage of:

a.the National Banking Act of 1863.

b.the Federal Reserve Act of 1913.

c.the Smoot-Hawley tariff of 1930.

d.the Glass-Steagall Act of 1933.

e.the Bank Secrecy Act of 1970.

131. Why does the Fed want to stimulate spending by decreasing interest rates?

a. Because they are Keynesians.

b. Because they are Monetarists.

c. Because they are Austrians.

d. Because they are gold bugs.

e. None of the above.

132. As a response to the 2001 recession, the Fed lowered the federal funds rate down to a low of about:

a. 3%

b. 2.5%

c. 2%

d. 1%

e. 0.25%

133. Which of the following financial intermediaries had the highest valued amount of assets when they failed?

a. Washington Mutual

b. Lehman Brothers

c. IndyMac

d. WaMu

e. Jos. A. Bank

134. Prior to the 2008 recession Fed chairman Ben Bernanke argued that:

a. there was no housing bubble.

b. housing prices would stabilize.

c. housing problems were local in nature and wouldn't affect the national economy.

d. All of the above.

e. None of the above.

135.Which of the following is true about Bear Stearns?

a.The Fed brokered a deal that allowed Goldman Sachs to buy out Bear.

b.The Fed lend Bear $13 billion for three days while a sale was being arranged.

c.In the year prior to its collapse, its stock price peaked at about $65.

d.The final sale of Bear was made at $6.50 per share.

e.All of the above.

136.To say that the Fed is run by Keynesians means that they:

a.believe in using tax cuts to stimulate the economy.

b.believe in using government spending to stimulate the economy.

c.believe that economic recovery is driven by the demand side.

d.believe that economic recovery is driven by the supply side.

e.Both A and B of the above.

137.Which of the following is not true about Bear Stearns?

a.In their last year in business their stock price peaked at about $65.

b.The Federal Reserve lent them $13 billion for a three day period.

c.J. P. Morgan ended up taking over Bear Stearns.

d.Existing stockholders in Bear would only get $10 per share from J. P. Morgan.

e.In their last year in business, Bear lost billions on subprime mortgages.

138. As a response to the 2008 recession, the Fed lowered the federal funds rate down to a low of about:

a. 3%

b. 2.5%

c. 2%

d. 1%

e. almost zero.

139. From 2008 to 2022, the Fed's holding of mortgage-backed securities went from zero to about:

a. $1.58 trillion.

b. $2.5 trillion.

c. $2.7 trillion.

d. $4 trillion.

e. Over $6 trillion.

140. To deal with a problem of rapidly rising inflation the Fed is likely to have to act in a way that Dr. Foster likened to the:

a. Hunger games.

b. Ender's gambit.

c. Joker policy.

d. Texas Hold 'em strategy.

e. Armageddon option.

141.Under which president(s) did our economic recovery enjoy the highest average annual growth in real GDP?

a. Reagan.

b. Obama.

c. Bush/Clinton.

d. Bush.

e.Trump.

142.When we look at new home sales we can note that they ___ through the recession of 2001 and ___ through the recession of 2008-2009.

a.rose; rose

b.rose; fell

c.fell; fell

d.fell; rose

e. remained unchanged; remained unchanged

143.Prior to the recessions of 2001 and 2008-2009, the Fed had been:

a.keeping interest rates constant.

b.lowering interest rates steadily for years.

c.raising interest rates steadily for years.

d.had raised interest rates and then leveled them off.

e.to allow markets to determine interest rates.

144.Which of the following is true about median home prices in the United States?

a.They fell sharply during both of the last two recessions (2001 and 2008).

b.They rose sharply during both of the last two recessions.

c.They rose by over $90,000 between January of 2020 and June of 2021.

d.Following the recession of 2008 they fell dramatically, and stayed at low levels for nearly ten years.

e.From 2009 to 2019 they have been stagnant.

145.Since 2010, the federal funds rate of interest peaked at about:

a. 5.3%.

b. 3.5%.

c. 2.4%.

d. 1.6%.

e.0.5%.

146.While the Fed's balance sheet had been trending downward from a high of over $4 trillion to about $3.9 trillion in 2019, it has since risen and as of April 2022 it was about:

a.$4.5 trillion

b.$5.5 trillion

c. $6.7 trillion

d. $7.8 trillion

e. $9 trillion

147.According to Dr. Foster, it seems odd that the best scenario that we can hope for in terms of our economy is for banks to _____ their excess reserves.

a.increase

b.decrease

c.retain

d.short

e.option

148.From their lows after the recession of 2008-2009, housing prices have since peaked at about:

a. $260,000

b. $295,000

c. $300,000

d. $350,000

e. $375,000

149.With the onset of the pandemic and recession of 2020, the Federal Reserve lowered its target federal funds rate of interest and it has since hovered around:

a.2%

b.1.5%

c.1%

d.0.75%

e.0%

150.With the onset of the pandemic and recession of 2020, the Federal Reserve has _____ the monetary base to a bit over _____.

a.raised; $4 trillion

b.raised; $5 trillion

c.lowered; $3 trillion

d.raised; $6 trillion

e.lowered; $4 trillion

151.From March of 2019 to March of 2022, the Fed's holdings of U.S. Treasuries has increased by about:

a.55%.

b.90%.

c.120%.

d. 170%.

e.200%.