17.The video “The Cost of Health Care” argues that there should be more reliance on the free market and less reliance on insurance in providing health care.
a.true
b.false
18.If you wanted to argue why Toga has good rates of growth, the weakest argument to make is that Toba has high rates of growth of
a.the money supply.
b.productivity.
c.the labor force.
d.population.
19.In the __________ range of the aggregate supply curve it is difficult to make policy decisions on whether to increase or decrease aggregate demand because _________.
a.classical — an increase in aggregate demand will cause both prices and output to increase
b.intermediate — an increase in aggregate demand will cause both prices and output to increase
c.intermediate – an increase in aggregate demand will cause both employment and unemployment to increase
d.Keynesian – no matter what the policy, unemployment remains high
20.The Walmart Effect of globalization refers to
a.that globalization is taking away the charm of small town downtown areas.
b.the costs of globalization.
c.the fact that globalization makes industries more competitive and goods less expensive.
d.the jobs being taken away by globalization.
The following three questions are based on the video Inside Job
21.The evil(s) that the video implies caused the housing and banking crisis was (were)
a.deregulation.
b.the Glass-Steagall Act.
c.outdated regulations.
d.both b) and c) are correct.
22.Which of the following is (are) true?
a.The Glass-Steagall Act overturned the Gramm-Leach-Bliley Act.
b.The Gramm-Leach-Bliley Act overturned the Glass-Steagall Act
c.The Glass-Steagall and Gramm-Leach-Bliley Act Acts came out about the same time but had contradictory aims.
23.The video supports further deregulation.
a.true
b.false
The remaining questions are on the Commanding Heights videos.
24.The battle of ideas is NOT between
a.free markets and government intervention.
b.Hayek vs. Keynes.
c.classical macroeconomic ideas vs. Keynesian ideas.
d.Hayek vs. laissez-faire
25.Germany after WWII began to show good economic results
a.immediately after peace was declared.
b.not until the building of the Berlin Wall.
c.when price controls were abolished.
d.both b) and c) are correct.
26.The battle of ideas according to the video was won by __________. If we consider the Obama stimulus policy dominating macroeconomic thinking ______ won the battle of ideas.
a.Hayek – Keynes
b.Keynes – Hayek
c.Hayek – also Hayek
d.Keynes — also Keynes
27.Hayek’s belief about macroeconomics was
a.he accepted monetarism but not Keynesian macroeconomics.
b.he did not believe in macroeconomics.
c.he treated macroeconomics as a complement to the free market beliefs of microeconomics.
d.he accepted any nonactivist macroeconomic school of thought.
28.Did Jeffrey Sachs, the Harvard economist, say that reforming of the Soviet Union was basically a carbon copy of the reforming of China?
a.yes
b.no
29.The significance of the phrase “We pretend to work” is consistent with
a.a real commitment to equality in socialism.
b.the lack of any real economic incentives in socialism.
c.that Marx always said labor worked much too hard.
d.that the Tienneman Square demonstrations in 1989 were wholeheartedly embraced by the Communist Party of China.
30.Deng, the once leader of China, said “I can distribute poverty or I can distribute wealth.” In this remark he is questioning the effectiveness of
a.socialism.
b.capitalism.
c.the mixed market economy.
31.Which of the following sequence of events in Chile is correct?
a.socialist rule, overthrow of Allende, Milton Friedman advising Chile on free markets
b.Milton Friedman advising Chile on free markets, overthrow of Allende, socialist rule
c.overthrow of Allende, socialist rule, Milton Friedman advising Chile on democratic socialism
d.Milton Friedman’s economic advising to Pinochet, John Maynard Keynes’ visit to Chile
32.Although Commanding Heights is ________ of market reforms, it concedes that the reforms can cause _________.
a.supportive — unemployment
b.supportive – dictators to get elected such as Chile’s Pinochet
c.critical – economic growth
d.critical – higher profits
For the following three questions match the good with its significance. Each one is only used once.
33.Potato chips
34.Panty-hose
35.Eggs
a.the good to follow to see if market reforms in Poland were really working
b.threw guards off the trail while a British Soviet spy was escaping the Soviet Union
c.shortage in the Soviet Union represented the general lack of consumer goods in the Soviet Union
d.the good to follow to see if market reforms in Chile were really working
36.The significance of the remark about more presents under the Christmas tree
a.points out the costs of globalization.
b.signified more religious commitment to increased production.
c.suggests that off shoring is a bad macroeconomic policy.
d.points out the benefits of globalization.
37.Hernando de Soto, the economist from Peru,
a.is a dedicated Marxist socialist.
b.is an avid free market economist, who says that unequal income distribution is a necessary evil of free markets.
d.says that for capitalism to work properly property rights must be clearly defined.
c.in an avid free market economist, who says that capitalism can help the poor.
e.both a) and b) are correct.
38.The Long Term Capital Management was affected by the Asian crisis, and the Congress and the President made direct taxpayer financed loans to them.
a.true
b.false
39.Jeff Sachs says that the reason for more global inequality now than in earlier history is
a.most tax laws favor profit incomes.
b.the Marxist predictions about inequality are correct.
c.in earlier times almost everyone was poor.
d.both a) and b) are correct.
40.What did the problems of Thailand and Eastern Asia in the 1990s have in common with the U.S. starting in 2008?
a.a housing bubble
b.a recession caused by the financial sector
c.a problem of one region/sector spilling over into another
d.all of the above
e.none, since the two cultures have very little in common
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