Los Angeles Valley College » Economics » Econ 010 - Economic History of the United States » Fall 2021

Econ 010 - Economic History of the United States » Fall 2021 » Homework 6

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Question #1

Why did it make sense to pay off the debts incurred from the Revolutionary War?

A. Because the holders of the debt were veterans of the conflict

B. Because the holders of the debt were the poorer members of society

C. Because the country’s leaders believed it was their gentlemanly duty to do so

D. Because it would help ensure the country would have access to loans in the future and could borrow at a lower rate of interest

E. Because the country had a tremendously large budget surplus so it was easy to pay it back

Question #2

Which of the following is FALSE about the monetary system?

A. It included both gold and silver

B. Despite laws to the contrary, states began to print their own money even after the Constitution was implemented

C. After the Revolutionary War, people believed the economy could get along fine with just paper money and no gold

D. Silver gradually disappeared from the money supply

E. Without silver, there was a concern that the economy would experience deflation

Question #3

Which of the following was one of the main benefits of the Second Bank of the US?

A. Helped finance the Gold Rush of 1849

B. Supplied the necessary emergency financing during the War of 1812

C. Provided a lot of credit to potential borrowers on the western frontier

D. Served as a lender of last resort to the state banks

E. Provided much needed loans to disadvantaged areas of the country

Question #4

While President Andrew Jackson was the cause of inflation in the middle 1830s, he was not responsible for the depression that took place from 1837 to 1844.

A. TRUE

B. FALSE

Question #5

How could the bank panics of the 19th century have been avoided?

A. By allowing government spending increases when the economy was in recession

B. Keeping interest rates low by increasing the money supply

C. By establishing a central bank on a permanent basis

D. Adding silver to the money supply

E. By providing deposit insurance

Question #6

How would we describe the difference between the North and South in terms of manufacturing and manpower during the Civil War?

A. They were evenly matched in both manpower and manufacturing

B. The South had the advantage in both manpower and manufacturing

C. The North had the advantage in manpower while the South had the advantage in manufacturing

D. The North had the advantage in manufacturing while the South had the advantage in manpower

E. The North had the advantage in both manpower and manufacturing

Question #7

What happened to the North’s real wages during the Civil War?

A. They decreased

B. They increased but only slightly

C. They were unchanged

D. They increased, then decreased, then increased again

E. They skyrocketed up due to the decline in the labor supply

Question #8

Suppose you are talking to a friend and you tell him you are taking a course about economic history and part of the course is about what the South’s economy was like after the Civil War. She responds “Oh yeah. I remember from US history that the South's real commodity output per capita decreased from 1860 to 1870 while the North's doubled over that decade.” What would be your response?

A. "While the South's real commodity output per capita did fall during that time, the North's only increased a little.”

B. “No way. The South's real commodity output per capita increased during that decade.”

C. "The class did not cover how the South and North were affected economically by the Civil War.”

D. “That’s right.”

E. "Who cares? The class is almost as boring as its teacher…and I mean BORING"

Question #9

The fact that the South continued to grow cotton after the Civil War despite the fall in its prices demonstrates an exception to the idea that people respond to incentives.

A. FALSE

B. TRUE

Question #10

Why was there so little spending on education in the South after the Civil War?

A. The failure of the southern states on a scheme to build a canal from South Carolina to Alabama

B. The inability of the South to engage in seignorage (printing money) to generate revenue

C. A conscious decision by the wealthier Southerners to minimize the chance that poorer Southerners would want to migrate north

D. The southern states spending most of their money to import cotton

E. Crippling taxes on the South from the North so that the South could pay the North back for the cost of the war

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