ECON496/ECON 496/ Econ 496 Midterm exam answered correctly.

ECON 496 Midterm Answered;2022. How many times did Adam Smith use "invisible hand" in the Wealth of Nations? How many times did Adam Smith use "ientrepreneur" in the Wealth of Nations? How many times did Adam Smith use "laissez faire" in the Wealth of Nations? How many times did Adam Smith use "system of natural liberty" in the Wealth of Nations? Which term is used more in Wealth of Nations, "supply" or "demand"? How many times is "supply" mentioned in Wealth of Nations? According to Adam Smith, what is the best measure of prosperity? What are the three essential elements of Adam Smith's model of prosperity? What did Adam Smith promise would be the results of a country adopting his model? A. The rich would get richer and the poor would get poorer. B. The people would become more religious. C. The country would see a dramatic increase in economic growth and a higher standard of living. D. The country would suffer from a trade deficit. E. The economy would minimize the business cycle. Who was the prime minister under King George III whose policies followed those outlined in the Wealth of Nations? Which of the following is true about Adam Smith? A. He was born and died in England. B. He published "The Wealth of Nations" in the same year Thomas Jefferson wrote "The Declaration of Independence" and Edward Gibbon published Volume 1 of "Decline and Fall of the Roman Empire." C. He was opposed to the American Revolution. D. As a customs official, he burned all his clothes that were illegally smuggled into Scotland and encouraged his friends to do the same. E. He was appointed professor of moral philosophy at Cambridge University. F. He never married. According to Adam Smith, which of the following actions would bring about 'the greatest improvements in the productive powers of labor?' Which of the following statements best reflects Adam Smith's philosophy? A. "Greed is good." B. "Selfishness is a virtue." C. "Individualistic capitalism is not beautiful, it is not just, and it is not virtuous." D. "There is no invisible hand channeling the self-centered action of each individual to the social optimal." E. "The commercial society moderates the passions and discourages fraud." F. "Private vices lead to public benefits of abundant wealth." G. "To prohibit a great people from making all they can is a manifest violation of the most sacred rights of man." Which of the following policies did Adam Smith support in the Wealth of Nations? A. Protectionism and most tariffs B. Monopoly grants from the crow C. A state religion D. Free education for youth E. A favorable balance of trade F. A balanced federal budget G. The gold standard Adam Smith wrote "The Wealth of nations after visiting what country? True or false: The "invisible hand" metaphor is only mentioned once in the middle of each of Adam smiths books, "The Theory of Moral Sentiments" and the "Wealth of Nations". According to historians, what forms of study did Adam Smoth find attractive tin support of a climatic central theme? A. Poetry of the Greek poet Thycydides B. Aristotelian golden mean C. Plato's allegory of the cave D. Newtonian physics E. Native American's totem poles What game did Adam Smith use to compare the temptation of conceited government agents to run the economy different from the actions of individuals and businesses? Which of the following statements best describes a resolution of Das Adam Smith Problem? A. "The Theory of Moral Sentiments" was written primarily for traditional close community of families and friends, while "The Wealth of Nations" was written primarily for city life where most people were strangers. B. Both sympathy and self-interest essential in the teachings of Jesus, "Love your neighbor as yourself." C. Citizens were naturally sympathetic toward those who were cheated by selfish business interests. D. The only way capitalism can be a "win-win" situation is when business people have both sympathy for the customer and self-interest to make a profit. E. Das Adam Smith Problem is unresolvable Which of the following are NOT part of Adam Smith's classical model of economics? A. The gold standard B. Marginal utility and pricing C. Paradox of thrift D. Invisible hand of competition E. Deficit spending during a depression F. Free trade G. Laissez faire Which economist was known as the "French Adam Amith"? Which of the following describes Say's law and its effects? A. Demand creates supply. B. The sale of X creates the demand for Y. C. Stimulating consumer spending is the key to entrepreneurial success. D. In a farming community, a bumper crop leads to prosperity for all; a bad harvest leads to depression. E. According to business cycle data, the economy begins to recover when consumers start spending again. F. When business succeeds, it creates wealth, income and jobs; when business fails, working people and their families suffer. G. Consumer spending is the effect, not the cause of prosperity. H. It is the aim of good government to stimulate production, of bad government to encourage consumption. Identify which statements best describe Say's law. A. If a nation as a whole saves more and cuts back on consumer spending, the result will be a recession. B. Consumer surveys are not especially useful in telling producers what products to sell. C. If you build it, they will come. D. Consumers are the engine of the economy, accounting for about 70% of economic demand. E. Though not one in a thousand recognizes it, it is business, not consumers, that is the heart of the American economy. F. Economic growth and declines have always been led by changes in business and durable goods investment, while final consumer goods spending has always been relatively stable through the business cycle. "If everyone enjoyed the unrestriced use of his facilities and free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing." "Industry, thrift, prudence. "Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest in his own way, and to bing both his industry and capital into competition with those of any other man, or order of men." "Thus is is the aim of gooden goernment to stimulate production, of bad government to encourage consumption." "I never met a citizen too poor to cast a glance of hope and envy toward the pleasure of the rich." Net Exports GDP = Gross Output = II = True of flase: The world will never run out of oil and gas. True of false" The number of cars and other vehicles have increased dramatically in the LA area since 1960 True of false: Air pollution has gotten signficiantly worse in the LA area since 1960. you are asked to be a consultant to the Chinese government. Which policy would you recommend as the best policy to pursue to reduce the growth of the Chinese population? Which of the followingdid Malthus and Ricardo have in common? A. Both applied the law of diminishing returns. B. Both accepted the iron law of subsistence wages. C. Both made a killing by buying British bonds during the 1815 Battle of Waterloo. D. Both were optimists about the future. E. Both were disciples of Adam Smith. Thomas R. Malthus is considered the father of the following: A. Environmentalism. B. Demographics and population studies. C. Population control and eugenics. D. Supply-side economics. E. Social Darwinism. F. Communism. Which countries have seen a decline in CO2 emissions since the year 2000? A. United States B. China C. European Union D. India What did Thomas Carlyle mean when he used the term "dismal science" to describe economics? A. Economists were always counting the costs of policies and remedies that could improve the economy, and warning the politicians anxious to spend money on a new pet project or dream, "It costs too much!" B. Economists do a lousy job of forecasting inflation, interest rates, and the next recession or crisis. C. He lashed out against the harsh "dog-eat-dog" competition and materialism of laissez faire capitalism, which he labeled "anarchy plus the constable." D. Malthus, Ricardo and other classical economists were deeply pessimistic about overpopulation, the miserly nature of the earth's resources, and the iron law of wages Which of the following represents David Ricardo's views? A. Marginal productivity of labor B. Inverse relationship between wages and profits C. Free trade D. Harmony of interests E. Quantity theory of money What economist is famous for inventing the "law of comparative advantage"? *correct Ans*- David Ricardo Fiedrich Hayek contended that "the reason which led the intellectuals to socialism was a man who is reagrded as a great hero of classical liberalism, _____" Which of the follwing is NOT true about John Stuart Mill? A. He favored Say's law. B. He wrote "On Liberty," the most influential statement of human individuality ever written. C. He supported Ricardian economics. D. He favored an irredeemable paper money standard. E. He believed distribution of income was separate from production. Increasing or decreasing: tariffs since 1900 (US) Increasing or decreasing: sea levels since 1900 Increasing or decreasing: world food production since 1900 Increasing or decreasing: air pollution in China since 2000 Increasing or decreasing: air pollution in the US since 2000 Increasing or decreasing: US church attendance since 2000 Increasing or decreasing: total real compensation since 1970 (US) Increasing or decreasing: number of people living on less than $1 per day Increasing or decreasing: stock market index since 2000 (US) Increasing or decreasing: interest rates since 2000 (US) Increasing or decreasing: world population growth rate since 2000 Increasing or decreasing: divorce rate since 2000 (US) Increasing or decreasing: number of abortions since 2000 (US) Which of the following logical fallacies is best reflected in this statement: "The Reagan tax cuts failed because the federal deficits increased during 1981-89." A. Ad hominem B. Confirmation bias C. Post hoc ergo propter hoc D. Bandwagon effect Which of the following statements best reflects John Stuart Mill's philosophy of liberty? A. Freedom is just another word for nothing left to lose. B. The right to swing your fists ends where the other man's nose begins. C. Taxation is the price we pay for civilized society. D. The triumph of persuasion over force is the sign of a civilized society. E. From each according to his ability, to each according to his needs. The motto, "From each according to their ability, to each according to their needs" implies which of the following: A. Social justice. B. Everyone is taxed at the same rate. C. 100% marginal tax rate above the "needs" level. D. The dirty jobs are equally distributed. E. The love of money is the root of all evil. Who said ""From each according to their ability, to each according to their needs"? American author Jack London made one word change to "From each according to their ability, to each according to their needs"? He change the word __________ to _______. Economists can use one word to describe the cause of socialism's downfall. Socialism lacks ________. Which of the following statements is true about the Homestead Strike of 1892? A. The union won out against Carnegie without bloodshed. B. Andrew Carnegie was at his estate in Scotland when the strike occurred. C. Carnegie Steel made record profits in 1892 but feared the decline in steel prices would cut into his profits. D. After the strike was over, workers returned to a 12 hour work day, but they got a wage increase. E. Carnegie sold Carnegie Steel to J. P. Morgan to create U. S. Steel in 1900. Henry Ford gave his board members three choices of what to do with the $30 million profit in 1915. What are the three choices? What option did Ford's board members oppose for profit usage? The story of Henry Ford's $5 a day wage increase destroyed two Marxist arguments against capitalismm. Identify those two. State the date: Publication of "The Wealth of Nations." State the date: Year Marx died and Keynes and Schumpeter were born. State the date: Publication of "Principles of Political Economy" by John Stuart Mill. State the date: Publication of "The Communist Manifesto". Which of the following policies did Marx and Engels advocate in The Communist Manifesto? A. Progressive income taxes B. Free public education C. Abolition of the free press D. Closing of the stock exchange E. Abolition of money F. One child policy G. Establishment of a national bank H. Abolish child labor. I. Abolish private property J. Nationalization of private businesses True or false: Pearls are valuable because men dive for them. True or false: According to Marx, capital-intensive industries are less profitable than labor-intensive industries. True or false: Albert Einstein considered himself a socialist. True or false: According to Marx, machinery and technology help the worker by making him more productive. According to Marx, which of the following classes is the least powerful under capitalism? Rank each of these 4 latin american countries by economic growth, from fastest to slowest: Mexico Venezuela Chile Argentina According to Michael Novak, author of "Will it liberate?" which of the following policies advocated by Christian Marxists was a mistake? A. Privatization B. Nationalization of industries C. Import substitution laws D. Dollarization E. Flat tax F. Free trade G. Exchange controls Which of the following book titles describes the Marxist view of the future? A. Free to Choose B. Twilight of Capitalism C. The Wealth of Nations D. Free to Lose E. The Cultural Contradictions of Capitalism Which of the following Marxist models have been proven accurate? A. The Transformation Problem B. Labor theory of value C. Kondratieff cycle D. The Immiserization of the working class E. The decline in the rate of profit True or false: Capitalism is only for the rich. True or false: Capitalism is about turning luxuries into necessities. True or false: Under capitalism, the rich get richer and the poor get poorer. True or false: US economic expansions and bull markets on Wall Street are lasting longer. True or false: Wall Street outperformed all other ofreign stock markets in teh 20th century, but has underperformed other country funds in the 21st century. Carl Menger disproved the labor theory of value and discovered the law of marginal pricing by observing what sector of the economy? True or false: Buy land, they aren't making more of it. it can only go up in price. (Will Rogers) Which of the following statements is true: A. Because the amount of land is limited, the elasticity of supply is perfectly inelastic. B. The population and real incomes are growing, which means increasing prices for real estate. C. Higher prices can cause new sellers of homes and raw land to enter the market, and thus depress prices. D. An economic recession and higher interest rates can cause real-estate owners to lower prices. Identify the two arguments made by Eugen Bohm-Bawerk to counter the Marxist argument that capitalists don't desrve their profits.