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Exam 24: The Great Depression

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Question 21

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Which group of economists argues that the stock market crash of 1929 significantly reduced wealth,causing consumption to fall and resulting in a significant downturn in residential construction and investments?

A) Classical economists.
B) Keynesian economists.
C) Monetarists.
D) Austrians.

E) C) and D)
F) B) and D)

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Question 22

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During the Great Depression,the U.S.was not firmly tied to the world economy.

A) True
B) False

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Question 23

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Unemployment in 1939,after a decade of recession and depression,still exceeded 10 percent.

The Great Depression is still the subject of controversy,including the question(s) of

Regarding business conditions during the 1930s,which of the following events did not occur?

There was a silver lining during the Great Depression.Compared to other periods in U.S.history,this period was one of the most technologically advanced.

The federal spending policies of the Great Depression were clearly expansionary and helped return the U.S.economy to the low levels of unemployment experienced during the 1920s.

As indicated by real GDP,real GDP per capita and nominal GDP figures,the Great Depression was unmoved by the social reconstruction efforts of President Franklin D.Roosevelt and his supporters.

How serious was the Great Depression? Explain by making reference to the various data that measure economic performance.Contrast the "Monetarist" view of the cause of the Depression with the "Keynesian" view.

Discuss the changes in federal tax policies during the Great Depression.Explain their impacts on private spending.

Why was Keynes' view considered heretical to classical or free market economists? What exactly did he propose that classical economists opposed?

Identify the successes and failures of the Federal Reserve System during the Great Depression.Describe the different views on the net success of the Fed.

Keynesian economics endorsed the idea of

Could the Federal Reserve have prevented the increased downturn from 1930 to 1932? What are the viewpoints of Friedman and Schwartz (1963),Temin (1989)and Bernanke (1995)on this?

Efforts to balance the federal government's budget by raising taxes provided a buffer to the economic downturn of the Great Depression.

If private investment had held up as well as consumption did,the economic contraction from 1929 to 1933 would have been less severe than it was.

The nominal money supply fell faster in 1929-32 than did prices.

Hughes and Cain (2011) talk about falling levels of investment during the Great Depression.What does the "investment" that they are talking about refer to?

Federal taxes increased in 1932,1935 and 1937,and Social Security taxes were imposed in 1937.Which group is credited for these tax increases during the Great Depression?

Explain how the Federal Reserve System and the overall banking system changed after the Great Depression.