economics quiz 1

Question 1

what are the 4 stages of the business cycle

Answer 1

depression, recovery, prosperity, recession

Question 2

what is laissez-fair

Answer 2

belief that government should keep their hands off the economy and let the individuals make the decisions

Question 3

whats the theory of ‘the invisible hand’

Answer 3

that the market naturally self-regulates as when individuals pursue their own interests/make their own decisions in self-interest, it overall benefits society/economy in general

Question 4

Whats John Maynard Keynes’s economic theory

Answer 4

economy moves in peaks and valleys and that the government should help to level these out in order to create a smooth economy

Question 5

whats the fiscal policy during recessions and depressions

Answer 5

to reduce taxes and increase government spending

Question 6

whats the monetary policy during recession and depression

Answer 6

lower interest rates

Question 7

What is the fiscal policy during property and recovery

Answer 7

increase taxes and decrease government spending

Question 8

whats the monetary policy during prosperity and recovery

Answer 8

increase interest rates

Question 9

what are the two main types of government intervention during the business cycle

Answer 9

fiscal policy and monetary policy

Question 10

whats the major problem of the free market economy

Answer 10

instability

Question 11

what happens in depression

Answer 11

rising unemployment, decrease in consumer buying power

Question 12

what happens in recovery

Answer 12

prices rise faster then costs, increase in production, increased imployement opportunities, new consumer demands, increased investment

Question 13

what happens in prosperity

Answer 13

rise in production

Question 14

what happens during recession

Answer 14

price and profits drop, production decreases, workers laid off, financial panic, people start to save money, production drops, factories shut down

Question 15

define fiscal policy

Answer 15

the use of government spending and taxation to influence the economy

Question 16

define monetary policy

Answer 16

actions to influence the economy by controlling a nation’s money supply through interest rates

Question 17

what was Rosevelt economic belief

Answer 17

you must spend money to make money and that by giving people they will spend it so eventually factories will produce again

Question 18

what was the purpose of the New Deal

Answer 18

alleviate the economic crisis created by the great depression

Question 19

what were the promises/programs of the New Deal (9)

Answer 19

emergency banking relief act, civilian Conservation Corps act, cultural adjustment act, Tennessee Valley Authority Act, national. employment system act, homeowners refinancing act, Glass-Steagall act, Farm Credit Act, National Industrial Recovery Act

Question 20

what happened in 1918

Answer 20

ww1 ended

Question 21

what happened in October 1929

Answer 21

stock market crashed and the great depression began

Question 22

what was the 1930s called and why

Answer 22

dirty 30s because of the great depression

Question 23

How many Americans were unemployed in the 1930s

Answer 23

25%

Question 24

what was the purpose of the Emergency Banking Relief Act

Answer 24

protect banking systems from collapse

Question 25

what was the purpose of the Civilian Conservation Corps Act

Answer 25

to provide work opportunities for the jobless

Question 26

what was the purpose of the Cultural Adjustment Act

Answer 26

control surplus agricultural production through price supports and subsidies

Question 27

what was the purpose of the Tennesse Valley Authority Act

Answer 27

to establish government agencies to promote economic development of the Tennesee Valley region

Question 28

what was the purpose of the National Employment System Act

Answer 28

establish a national employment system

Question 29

what was the purpose of the Homeowners Refinancing Act

Answer 29

to provide loans and mortgages to homeowners

Question 30

what was the purpose of the Glass-Steagall act

Answer 30

regulate banking industry

Question 31

what was the purpose of the Farm Credit Act

Answer 31

provide short and medium-term loans to farmers for production and marketing

Question 32

what was the purpose of the NATIONAL INDUSTRIAL RECOVERY ACT

Answer 32

Revive industrial activity and reduce unemployment through government regulations

Question 33

when did FDR take office and what did he promise

Answer 33

1933 with the promise of a new deal

Question 34

what else did President FDR do

Answer 34

abolished prohibition