ECON HIST FINAL Flashcards
- Why are monopolies “bad” from an economic and social point of view?
consumers don’t have as much purchasing power than in a competitive economy
- What was a “trust” and were the various government attempts to curb anti-competitive
behavior before WWII successful?
.- One company operates the smaller companies. Owners gave up control to the trust. Profits of the whole trust were split
- A trust is a way to act like a monopolist
- The Trust reduce incentive for firms to “cheat” (lowering prices below agreed upon rates) problem that cartels have
- U.S. industrial concentration grew 1870-1920. What is the difference between horizontal and vertical mergers? What is a natural monopoly, and why aren’t natural monopolies “bad” for the economy?
- Horizontal mergers you are one who is doing one part in the supply chain
- A horizontal merger is a merger or business consolidation that occurs between firms that operate in the same industry
- Vertical mergers Definition A vertical merger is the combination of two or more companies involved in different stages of the supply chain of a common product or service. A hypothetical example would be if a grocery store that sells milk and cheese, purchased a dairy farm that produces milk and cheese
- Natural monopoly isn’t bad if we consider infrastructure for example. Too costly for every company to build own grid out of business
- What was immigration’s effect on the labor force and wages from 1870 to 1920? Be sure to note the distinction between skilled and unskilled labor. Why was both skilled and unskilled labor opposed to immigration?
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Between 1870 and 1930, various laws restricting immigration were put into place. Explain who the “new immigrants” of the period were. What were the attempts to keep their numbers low?
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Between 1870 and 1920, labor union power grew then receded, and there was much violent conflict. What were unions fighting for during this period, and were they successful? Was the government sympathetic to union’s concerns? Explain.
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According to Dora Costa, what has been the history of women’s labor force participation and type of work in each period 1820-1890, 1890-1950, 1950-1970, and 1970 to today? What accounts for changes in female participation in each period and over time? Why is female labor force participation “U-shaped?”
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What is a stock and a stock market? What did Charlie Dow and Eddie Jones do? What is the Dow Jones Industrial Average?
- Stock is a share of ownership
- Stock market contains publicly listed companies (secondary markets) where an individual can trade his/her shares
- Dow Jones Industrial Average is an weighted average index where is 30 biggest US companies measured by their market capitalization
- Explain what determines stock prices (the “Fundamentals” approach)? How is an asset “bubble” different?
- Future payments discounted to this period (interest rate affects as well)
- When payments do not add up to current prices bubble
. Stock prices rose to record levels before the Depression. Does the evidence support the claim that the stock market was an irrational “bubble” throughout the 1920s? Explain.
- The expansions and contractions in real GDP around its long-term trend
- From peak to trough (pohja) recession
- From trough to peak expansion
What is buying on “margin?” and how might this have made the stock market crash in 1929 worse?
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What are the three conditions most conducive to speculative bubbles? Was the increase in stock prices in the late 1990s an example of a bubble?
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- Describe the characteristics of the 1920s Florida Land Boom. When and why did it end?
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How does the price of housing today compare to the price of housing since 1890? What
determines the “fundamental” price of housing, and what has happened to the price of housing
relative to rent and income over the last 30 years?
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- What was the “Bonus Army” and what did they want?
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