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American Foundations Cycle II
American Foundations Cycle II
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A prep quiz for the American Foundations Cycle II exam
Flashcards
50 cards
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Practice quiz
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Questions
50
Answers
1
What is the second fallacy of free market? (mentioned in class)
Competition is bad
Competition = Monopoly
Cooperation = Consumer Rules
Cooperation is bad
2
Which is
NOT
one of the functions of money?
Medium of Exchange
Store of Value
Unit of Account
Unit of Interest
3
What book did Milton Friedman and
Anna Schwartz
write?
The Rise of Capitalism
A Short History of Financial Euphoria
The Rise and Fall of American Growth
Monetary History of the United States
4
Who presented the idea that "political extremism" is the problem with socialist economies?
Adam Smith
Joseph Smith
Arthur M. Schlesinger, Jr.
Spencer W. Kimball
5
What is the remedy for this market weakness (Externalities)?
Internal Controls
External Controls
Provide Basic Welfare
6
What book did Adam Smith write?
The Spirit of Capitalism
The Wealth of Nations
The General Theory of Employment, Interest, and Money
A Monetary History of the United States
7
Who was Arthur M. Schlesinger, Jr.?
American Historian
French Historian
British Historian
German Historian
8
Who said, "self-aggrandizement . . . is a correct principle . . . ?"
Adam Smith
Brigham Young
Andrew Carnegie
Joseph Smith
9
What happens when someone specializes in a certain trade or skill?
Become unreliable elsewhere, which lowers the economy.
Lowers the marginal opportunity cost of production.
Their trading options become limited.
Cost goes up. (due to improved quality)
10
Who was Andrew Carnegie?
Scottish immigrant that became the richest man in 1900's
Eventually owned all the oil companies.
Opposed philanthropy
Inherited a fortune, including a steelmaking company.
11
Using a new road that was made by the government deals with which market weakness?
Business Cylce
Inequality
Positive Externality
Negative Externality
12
What was his thesis? (or Philosophy)
The Invisible Hand
The Supply and Demand Curves
Monetarism
Beliefs determine economics
13
What is the fourth fallacy of free market? (mentioned in class)
Zero Sum
Nature Satisfied
Culture Contamination
Value Neutral
14
What was his philosophy?
Post-Scarcity Economics
Monetarism
Classical Economics
Keynesianism
15
Selling beef that is infected with e coli deals with which market weakness?
Poverty
Externalities
Imperfect Information
Instability
16
What are the three economic systems?
External, Free Market, Internal
Free Market, Government Market, People's Market
Capitalist, Chaos, Command (Planned)
Free Market, Socialist, Democratic
17
What is the result of a price floor?
Cheaper products
Shortage
Surplus
Inflation
18
What is the third fallacy of free market? (mentioned in class)
Free Market System = Poor get richer
Profit = Greed
Free Markets = Evil Incentives
Greed = Unhealthy lust for money
19
Who was Max Weber?
German Sociologist
American Economist
Scottish Economist
British Economist
20
According to Keynesianism, what causes economic downturns?
Shortage of goods
Insufficient demand.
Surplus of goods
Insufficient supply
21
What is the remedy for this market weakness (Disruption)?
Internal Controls
Provide Basic Welfare
External Controls
Life Insurance
22
According to Keynesianism, what can prevent, or stop, economic downturns?
Less government spending
Increase $ supply and lower interest rates.
Decrease the money supply
Cutting taxes and more government spending.
23
Which Fed Chairman increased money supply after "Crash of 87"?
Paul Volcker
G. William Miller
Alan Greenspan
Janet Yellen
24
According to his book, "
The Vital Center
," where is success found?
In the middle ground between tyranny and anarchy
In the middle ground between man and women
In the middle ground between democracy and communism
In the middle ground between communism and fascism
25
What is the secret to wealth?
Smart Government Control
Free Exchange
Rich Parents
Natural Resources
26
What is the first fallacy of free market? (mentioned in class)
Free Gift = Stagnation
Self-Interest = Selfish
Helping Others = Helping Yourself
Self-Centered = Pride
27
What is a Command (Planned) Economy?
Socialism
Governments agree to trade with eachother
People use their property how they want
The government controls trade and other economic activity
28
What book did he write?
The Rise and Fall of American Growth
The Spirit of Capitalism
The General Theory of Employment, Interest, and Money
A Monetary History of the United States
29
What is minimum wage?
Price Ceiling
Price Floor
30
Who presented the idea of a Charter City on TED talks?
Tim Jackson
Joseph Pine
Paul Romer
Alan Greenspan
31
What are External Controls?
Limited international trade
Lawsuits
Taxes
Government prevention of regulations.
32
Which Fed chairman helped cure inflation during the late 70's?
Andrew Carnegie
Paul Volcker
Alan Greenspan
Milton Friedman
33
Which was part of Adam Smith's philosophy?
The Supply and Demand Curves
Beliefs Determine Economics
The Invisible Hand
Monetarism
34
What is the remedy for this market weakness (imperfect information)?
External Controls
Provide Basic Welfare
Internal Controls
The Internet
35
What are the seven weaknesses of the free market economy?
Do not pick me
Pick me
36
What is the result of a price ceiling?
More expensive products
Inflation
Surplus
Shortage
37
What book did Max Weber write?
Religion and the Rise of Capitalism
The Protestant Ethic and Spirit of Capitalism
The Theory of Religious Economy
The Origin of Wealth
38
What are the possible negative consequences of an increase in money supply?
Inflation and surplus
Inflation and stock market crash
Inflation and shortage
Inflation and "bubbles"
39
Who is Milton Friedman?
Economist during the Great Depression
Economist with a strong belief in keynesianism
Economist with the monetarist view point
Economist during World War II
40
Who is Adam Smith?
German Sociologist
British Economist
Scottish Economist
American Economist
41
Are external controls good or bad for a free market economy?
Good
Bad
42
What is Monetarism?
Decrease money supply to combat economic recession
Increased money supply causes an increase in interest rates
Changes in money supply can determine economic performance
Increase interest rates to combat economic recession.
43
Who was John Maynard Keynes?
British Economist
French Economist
American Economist
German Economist
44
What is a Chaos Economy?
An economy in which criminal's prevent free exchange
An economy of disorderly bidding
An economy based of force by the military
An economy with unpredictable government intervention
45
Match these words with their representations on the graph:
price, quantity, supply, demand.
A, B, Curve 2, Curve 1
B, A, Curve 2, Curve 1
A, B, Curve 1, Curve 2
B, A, Curve 1, Curve 2
46
Where do both curves meet (the blue dot at the center of the X)?
Break-Over Point
Greenspan Point
Focus Point
Equilibrium Point
47
What is an economic, or market, bubble?
As supply of a product decreases, its price increases.
Caused by a stock market crash.
Trade (in an asset) at a price that exceeds the true value.
Trade (in an asset) at price that falls below the true value
48
Which does
NOT
happen when the Fed Increases the money supply?
Bank failure is prevented
Interest rates lower
Economy is stimulated
Money holds its value indefinately
49
Broulims goes out of business because of Walmart. This deals with which market weakness?
Inequality
Disruption
Monopoly
Negative Externality
50
Which is
NOT
an internal control?
Inspections of products
Rules
Limited international trade
Regulations
