| a. Good regimes are ruled by philosophers. | ||
| b. Good regimes look to the common advantage, where citizens alternate between serving as rulers and being ruled. | ||
| c. Good regimes manage to promote and concern themselves with the arts. | ||
| d. Good regimes are based on equality of opportunity for political office and equality of primary material resources. |
| a. Conflict precipitated by the rise of political factions | ||
| b. Indifferent and lackluster leadership | ||
| c. Poor economic performance and management | ||
| d. Outside influence in the form of foreign intrusion and/or invasion |
| a. The value of a good is directly proportional to the amount of human labor used to make it. | ||
| b. The value of a good is apportioned between capital inputs and labor. | ||
| c. The value of a good is determined by what consumers will pay for it. | ||
| d. The value of a good is optimally apportioned among land, labor, and capital. |
| a. Undermine domestic stability | ||
| b. Engage in extortion | ||
| c. Sell their goods where they fetch the highest prices | ||
| d. Sell their goods for fair value to ensure long-term viability |
| a. With a clear inflection point | ||
| b. With a favorable balance of trade | ||
| c. With a slow sustained rally | ||
| d. With moderate deflation |
| a. Demand and its role in exchange value | ||
| b. Supply and its role in use value | ||
| c. Demand and its role in use value | ||
| d. Supply and its role in exchange value |
| a. Industrialization allowed for the exposure of ideas associated with the Enlightenment to a wider segment of the populace. | ||
| b. Industrialization created a chasm between a human being and the end-product of their work, turning labor itself into a commodity. | ||
| c. Industrialization strengthened local communities. | ||
| d. Industrialization provided an avenue for human beings to realize their potential. |
| a. The aristocracy | ||
| b. Consumers | ||
| c. Colonial settlers | ||
| d. Producers |
| a. The existence of general equilibrium | ||
| b. The uniqueness of general equilibrium | ||
| c. The stability of general equilibrium | ||
| d. The computability of general equilibrium |
| a. Democrats mistakenly think of equal citizenship as the ground of worth without regard to specialization or virtue. | ||
| b. Democrats mistakenly believe that the end of the state is freedom, and they identify the best life with the life of freedom to satisfy one's desires. | ||
| c. Oligarchs think that wealth - a characteristic in terms of which citizens are unequal - is the ground of worth. They believe so because they mistakenly think the end of the state is to accumulate wealth and property, and they mistakenly identify the best life with the possession of these external goods. | ||
| d. Aristocrats are only capable of recognizing and understanding what is excellent and fine because of inborn talents and abilities passed from one generation to the next. |
| a. well-being attained through a life of action on the part of the soul that has reason. | ||
| b. the realization and application of one's natural talents and abilities for the glory of the gods and the city-state. | ||
| c. the safety, security, and prosperity of loved ones and family. | ||
| d. leisurely pleasures enjoyed after hard work and sacrifice. |
| a. it is virtuous to limit one's desires in the face of economic scarcity. | ||
| b. it is virtuous to overcome economic scarcity to satisfy one's desires. | ||
| c. private property should accrue to those who are most virtuous. | ||
| d. communal property is the natural state of affairs for a society. |
| a. resources should be distributed across society to attain the maximum amount of strength and prosperity of the city-state as a whole compared with other city-states. | ||
| b. resources should be distributed away from those who have already crossed a threshold of well-being to help ensure that others will cross this same threshold. | ||
| c. situations and communities are just when individuals receive benefits according to their merits, or virtue: those most virtuous should receive more of whatever goods society is in a position to distribute. | ||
| d. a basic level of resources should be distributed by the political class equally among all citizens to prevent discord and promote harmony, while saving resources for public festivals that celebrate the gods. |
| a. decisions to save and invest. | ||
| b. the degree to which an individual is willing to work and the skills that he or she can employ. | ||
| c. decisions to spend, consisting of consumption decisions and investment decisions. | ||
| d. the availability of opportunities given the current national economic climate. |
| a. along the lines of Aquinas, usury laws should accommodate investment societies. | ||
| b. the level of interest was nothing more than a measure corresponding to the risk of default as assessed by a lender and the need of a borrower. | ||
| c. the state was justified in setting a maximum limit for interest rates charged by lenders. | ||
| d. the state should only be involved in the practice of lending to merchant seaman, given the high degree of risk involved. |
| a. directly through excise taxes at port-of-entry. | ||
| b. indirectly through high taxes used to fund a strong navy necessary for the protection of sea lanes. | ||
| c. directly through the value added tax. | ||
| d. indirectly through the prevalence of indentured servitude. |
| a. an uncharitable act but acceptable on rare occasions between consenting parties. | ||
| b. a practice which should not be domestically institutionalized but which could reap advantages in selectively promoting foreign expeditions. | ||
| c. a theft and a sin. | ||
| d. a way to control the activities of the populace. |
| a. Marginal analysis | ||
| b. The diamond-water paradox | ||
| c. The invisible hand | ||
| d. Exchange value vs. use value |
| a. Too much emphasis on equality leads to pervasive mediocrity instead of that which is virtuous. | ||
| b. Equality cannot be practically achieved, and trying to achieve it leads to conflict. | ||
| c. A commitment to equality undermines liberty. | ||
| d. Equality as a proportionate measure must take into consideration what is to be addressed and from what starting point; however, with regard to politics, it is difficult to determine in what regard and to what degree individuals begin as equals. |
| a. Education | ||
| b. A good seaport and free trade | ||
| c. A thriving and diversified agricultural sector | ||
| d. A standing army and navy |
| a. The possession of property is only possible after exiting the state of nature when ownership can be legally recognized and sanctioned. | ||
| b. The possession of property is a natural right and exists within the state of nature. | ||
| c. The possession of property does not exist in the state of nature, because everything has been provided to us in common by God. | ||
| d. The possession of property corresponds to who is the strongest in the state of nature, according to law in civil society. |
| a. The love of God | ||
| b. Parents | ||
| c. Our own self | ||
| d. Original sin |
| a. They both focus on consumer choice. | ||
| b. Neither is directly concerned with the needs of the poor as an individual segment of society. | ||
| c. Neither addresses the role of capital in relation to economic growth. | ||
| d. They both focus on government rules as a panacea, albeit in very different ways. |
| a. As a microeconomic discourse | ||
| b. As a macroeconomic discourse | ||
| c. As an international economic discourse | ||
| d. As a pure synthesis of micro and macroeconomics |
| a. Jobs should be assigned strictly on the basis of hereditary social standing. | ||
| b. Jobs should be assigned by public lottery and rotated according to set time frames. | ||
| c. Jobs should first be filled by citizens according to social standing, while remaining positions should be assigned according to ability or to slaves. | ||
| d. Jobs should be assigned both according to social standing and ability. |
| a. Jevons understood labor as having a certain uniform power, with skilled producers being an exception to the rule. | ||
| b. Jevons and Ricardo both understood labor as having a certain uniform power, but Jevons gave greater weight to education and training in allowing for differences in production. | ||
| c. Jevons viewed the ability of humans as infinitely varied, whether by nature or by education, meaning people vary to a great degree in their capacity to produce different products or to provide different services. | ||
| d. Jevons attempted to assign a mathematical quantity to Ricardo's notion of human labor as a certain uniform power. |
| a. Skill-based education existed to confuse the minds of simple workers. | ||
| b. Skill-based education needed to be centralized to strengthen the state. | ||
| c. Skill-based education needed to be decentralized to empower the masses. | ||
| d. Skill-based education was linked to higher wages. |
| a. Petty broke down the complex to the basic through statistical analysis and logic. | ||
| b. Petty applied Aristotle's dialogue method. | ||
| c. Petty restricted his analysis to the economy of the household. | ||
| d. Petty was an apologist for the ruling classes. |
| a. The political structure is the superstructure of society; however, its existence is dependent upon and its nature is determined by the mode of production. | ||
| b. The mode of production is the superstructure of society and is determined by the political structure. | ||
| c. The political structure and the mode of production influence each other, one being more prominent than the other in governing society depending on the circumstances. | ||
| d. The political structure and the mode of production are both subordinate to the phenomenology of history as manifested in the growth of a collective spirit across a given geographical area at any given point in time. |
| a. By demonstrating the efficiency of a totalitarian state | ||
| b. By defining the nature of humanity in association with agricultural activity | ||
| c. By identifying economic cycles in accordance with natural cycles | ||
| d. By expounding upon and analyzing division of labor, based on the principle of specialization as fundamental to human nature |
| a. That truth is found through use, meaning through trial and error as opposed to formal abstraction | ||
| b. That all understanding and explanations of human behavior can be reduced entirely to the notion that humans seek to maximize pleasure and minimize pain | ||
| c. That the most virtuous life is a life led with humility and a disdain for extravagance | ||
| d. That life is comprised of nothing more than the production and consumption of material goods |
| a. Farmers live far from the city center and cannot be relied upon to participate in politics. | ||
| b. Farmers lack political knowledge and training in logical argumentation. | ||
| c. Farmers do not have enough leisure time to cultivate political virtues. | ||
| d. Farmers should not align themselves politically, given the importance of food to everyone. |
| a. Free competition generates a relative maximum amount of welfare for a society, where it is impossible to make anyone better off without making someone else worse off. | ||
| b. Imperfect competition generates a relative maximum amount of welfare for a society, where it is impossible to make anyone better off without making someone else worse off. | ||
| c. Free competition generates a relative maximum amount of welfare for a society by maximizing each individual's welfare in relation to everyone else's welfare. | ||
| d. A relative maximum amount of welfare for a society can be achieved by maximizing each individual's welfare in relation to everyone else's welfare through some variety of redistribution between individuals. |
| a. The mixing of one's own labor with that which is not owned | ||
| b. A temporary holding authorized under the legislature of that which is given to all in common by God | ||
| c. An acquisition that can be either just or unjust depending on the manner in which it is carried out | ||
| d. A just process where the law is silent |
| a. He emphasized the notion that the state was instrumental in establishing standards of measurement in economic transactions, whereas Taoists deemphasized the state's influence. | ||
| b. Unlike the Taoists, Ssu-ma Ch'ien saw government as necessary to prevent depravation and violence in society. | ||
| c. Unlike the Taoists, Ssu-ma Ch'ien did not see the limitation of desire as a solution to economic problems. He understood desire as integral to vibrant economic activity and consequent prosperity. | ||
| d. Ssu-ma Ch'ien advocated violent opposition to government rule, whereas Taoists advocated passive resistance. |
| a. Thomas Hobbes's state of nature and the need for a strong sovereign | ||
| b. Adam Smith's notions of divine providence, earthly abundance, and the resulting harmony of interests | ||
| c. David Hume's principle of scarcity and the resulting conflict of interests | ||
| d. Alexander Hamilton's arguments for strong central government institutions |
| a. Greek, Roman, medieval, Renaissance | ||
| b. Communal, ancient, feudal, capitalist | ||
| c. Ancient, medieval, modern, post-modern | ||
| d. Jewish, Christian, Muslim, secular |
| a. Monopoly pricing | ||
| b. Imperfect competition | ||
| c. The labor theory of value | ||
| d. The political structure as superstructure |
| a. Raw materials were essentially "free on board" (f.o.b.) because of the large Royal Navy. | ||
| b. England had an optimal geography as an island. | ||
| c. Spain had adopted a mercantilist system earlier than England did, and Spain was winning the economic war. | ||
| d. Goods produced by a large number of specialists were made better and cheaper. |
| a. The mercantilist system increased uncertainty because of the lack of public information. | ||
| b. The mercantilist system increased risk-taking in the hopes of securing monopoly profits. | ||
| c. The mercantilist system decreased risk-taking because of oligopolistic controls. | ||
| d. The mercantilist system decreased uncertainty through the maintenance of established relationships. |
| a. An increase in savings results in a larger pool of funds which banks can draw upon to make loans, which in turn makes for a total increase in economic activity. | ||
| b. An injection of income stimulates more production and investment involving more income and spending, which results in a total increase of economic activity. | ||
| c. A depreciating currency results in cheaper exports and more expensive imports, which ultimately stimulates a domestic economy and a total increase of economic activity. | ||
| d. An appreciating currency results in greater buying power and larger foreign investment, which ultimately stimulates a domestic economy and a total increase of economic activity. |
| a. Limited government leads to individual flourishing and to social order. | ||
| b. Bureaucratic control of social affairs leads to the greater good, as opposed to the pursuit of individual interests. | ||
| c. War is inevitable and taxes are necessary to maintain a standing army. | ||
| d. Dynastic succession should be subject to popular approval. |
| a. John Maynard Keynes | ||
| b. Thorstein Veblen | ||
| c. Freidrich Hayek | ||
| d. John Kenneth Galbraith |
| a. The social class that holds more than 80% of the distributed wealth in a given society | ||
| b. The social class that straddles the middle third of total distributed wealth in a given society | ||
| c. The social class that owns the principal means of production in a society, regardless of absolute personal value | ||
| d. The social class that owns no means of production and can only subsist by the selling of its principal asset of labor |
| a. Any price set by an appropriate local governing body | ||
| b. Any price set by the Council of Rome | ||
| c. Any price arrived at between a buyer and a seller | ||
| d. Any price determined by producers based upon material inputs and labor and approved by an appropriate local governing body |
| a. Foreign trade came to a virtual standstill. | ||
| b. Local private markets were replaced by state-run warehouses and a system of allotments. | ||
| c. A black market arose for basic foodstuffs. | ||
| d. A just price became any price set by state authorities. |
| a. First, that every competitive equilibrium is Pareto-optimal (or efficient), such that no one can be made better off without making someone else worse off, and second, that all Pareto-optimal allocations begin from a state of absolute equality between individuals | ||
| b. First, that every competitive equilibrium is Pareto-optimal (or efficient), such that no one can be made better off without making someone else worse off, and second, that any Pareto-optimal allocation can be achieved as a competitive equilibrium with some redistribution of the agents' initial endowments | ||
| c. First, that every competitive equilibrium is Pareto-optimal (or efficient), as long as at least one person can still be made better off without making someone else worse off, and second, that all Pareto-optimal allocations begin from a state of absolute equality between individuals | ||
| d. First, that every competitive equilibrium is Pareto-optimal (or efficient), as long as at least one person can still be made better off without making someone else worse off, and second, that any Pareto-optimal allocation can be achieved as a competitive equilibrium with some redistribution of the agents' initial endowments |
| a. Monopoly pricing | ||
| b. General equilibrium theory | ||
| c. The paradox of price | ||
| d. Perfect competition |
| a. Interpersonal comparisons of units of utility | ||
| b. Interpersonal comparisons of capabilities or advantage | ||
| c. Mathematical representations of personal preferences | ||
| d. Mathematical representations of group preferences |
| a. The relationship between distribution and exchange | ||
| b. The relationship between capital and labor | ||
| c. General reasoning with regard to the relationship between demand and supply, which is required as a basis for the practical problems associated with value | ||
| d. General reasoning with regard to inflation and the rate of interest |
| a. Marginal utility | ||
| b. Marginal returns on capital inputs | ||
| c. Interpersonal comparisons of utility | ||
| d. Pigou's notion of a national dividend and its relation to welfare |
| a. The Law of One Price | ||
| b. Say's Law | ||
| c. Physical product analysis | ||
| d. Marginal analysis |
| a. Stagflation in the early 1970s | ||
| b. The Long-Term Capital Management (LTCM) crisis | ||
| c. Deflation in the 1980s | ||
| d. The Mexican financial crisis |
| a. The division of labor is entirely dependent on the natural lottery of talent spread among a given populace. | ||
| b. The division of labor is dependent on the natural lottery of talent but is also held captive according to the willingness and desires of individuals comprising the populace. | ||
| c. The division of labor is determined by the extent of the demand for various products. | ||
| d. The division of labor must be determined by a higher authority and be transferred on a hereditary basis to maintain social stability and to promote expertise. |
| a. Developing a poverty index | ||
| b. Showing how externalities were paid for primarily by the poor | ||
| c. Showing how marginal utility did not apply to the poor | ||
| d. Relating the concept of a national income to the general welfare of society by employing the marginal method in analyzing the welfare implications of income |
| a. In the thought of the Federal Reserve Bank of the US in the 1980s | ||
| b. In the central banks of developing countries and, in particular, Latin America in dealing with hyperinflation | ||
| c. Russia after the collapse of the Soviet Union | ||
| d. China under Deng Xiaoping |
| a. Fan Li, because he advocated intermarriage between rival clans | ||
| b. Fan Li, because as a pharmacist he was of the view that all people are fundamentally the same | ||
| c. Kautilya, because he viewed marriage as the basis for all disputes | ||
| d. Kautilya, because he advocated marriage as a vehicle for mobility with regard to social status |
| a. The social class that straddles the lower third of total distributed wealth in a given society | ||
| b. The social class that holds less than 15% of the total distributed wealth in a society | ||
| c. The social class that owns no means of production except that of their own labor | ||
| d. The social class that owns the secondary means of production in a society, regardless of absolute personal value |
| a. Supply creates demand. | ||
| b. When a product is created, it affords a market for other products equal or up to the full extent of its own value. | ||
| c. When there is unmet demand for a particular product, it affords a market for the substitution of goods to meet that demand. | ||
| d. When a product is created without consideration of demand, owners attempt to subvert the market and thus create distortions. |
| a. Under the newly-established system of nation-states, monarchies viewed other nation-states as competitors in a zero-sum game over a limited amount of resources that were there for the taking. The notion of economic growth occurring through trade and comparative advantage was non-existent. | ||
| b. Monarchies feared that the influx of gold and silver from lands previously unknown would weaken their hold over power. | ||
| c. Monarchies sought to strengthen their coffers to embark on vast domestic public works projects, given new advances in science and civil engineering, and to placate the masses. | ||
| d. Monarchies aligned themselves with merchants, given they were keenly aware of their precarious position vis-à-vis the masses after the publication of Renaissance and Enlightenment ideas. |
| a. Arrow's theorem came to the conclusion that the second welfare theorem could not approach practical implementation. | ||
| b. Arrow demonstrated under very mild conditions that social or group decisions as to what the individual members of a society want cannot be simultaneously satisfied by any social choice procedure that could be described as rational and democratic. | ||
| c. Arrow's existence proofs demonstrated that general equilibrium equations had some solution but did not show that there was just one equilibrium (uniqueness); that an economy in disequilibrium would necessarily converge to equilibrium (stability); and that the precise characteristics of equilibrium could be found once the data of preferences, endowments, and technology had been given. | ||
| d. Arrow's theorem mathematically demonstrated how government intervention through the use of monetary and fiscal policy was incommensurate with sustainable full employment over the long-term. |
| a. The American Civil War | ||
| b. The movement to free India from British colonial rule led by the Indian National Congress | ||
| c. Increasing economic disparity | ||
| d. The prevalence of tuberculosis |
| a. Diminishing marginal return | ||
| b. Depreciation | ||
| c. General equilibrium | ||
| d. Diminishing marginal utility |
| a. Inequalities in a society should only exist to the extent to which they benefit the worst off. | ||
| b. The best society that one can realistically hope for is that which comes to strive for and realize the greatest good for the greatest number. | ||
| c. Material achievement justifies sacrifice by the many to ensure the glory of the state and the spread of Enlightenment ideals to foreign lands. | ||
| d. Individuals should only desire that which is the most simple and useful, while that which is extravagant and luxurious should be reserved for what can be enjoyed in common. |
| a. Neoclassical economics | ||
| b. The neoclassical synthesis | ||
| c. John Maynard Keynes | ||
| d. Government central planning |
| a. Property may only be appropriated through one's own labor. | ||
| b. The amount of what is appropriated may only be in direct proportion to the amount of labor that is mixed with it. | ||
| c. The amount appropriated may not exceed that which can be used before it spoils. | ||
| d. After property has been appropriated, enough and as good property must be left for the use of others. |
| a. To make tax collection more efficient | ||
| b. To balance economic weaknesses and strengths spread across the states | ||
| c. To best manage the debt incurred from the Revolutionary War | ||
| d. To control and reduce the influence of religious sects on economic issues |
| a. Smith explained how markets require other institutions for efficacy and viability. | ||
| b. Smith emphasized that self-interest and a profit motive are not all that is needed to sustain the beneficial role of markets to society at large. Prudence, generosity, public spirit, and a sense of justice are also crucial. | ||
| c. Smith argued that markets may need restraint, correction, and supplementation for preventing instability, inequity, and poverty. | ||
| d. Smith argued that the pure market mechanism unadulterated by outside influences was an engine of excellence and virtue. |
| a. It considers human behavior to be first and foremost determined by institutions. | ||
| b. Its primary subject matter is collective action associated with the control, liberation, and expansion of individual action. | ||
| c. It considers the smallest economic unit to be a unit of activity - a transaction, together with its participants. | ||
| d. It is concerned with the psychological behavior of individuals while participating in transactions. |
| a. Pareto revived Bentham's notion that individual utility could be measured in units by applying developments in cognitive psychology to more accurately reflect a person's pleasure and pain through the use of cardinal numbers. | ||
| b. Pareto rejected that an individual's pleasure or pain could be accurately measured through the use of cardinal numbers, but he supported that it could be done so ordinally, meaning it could be reflected whether a consumer preferred one thing over another. | ||
| c. Pareto made the important assumption that utilities of different commodities are not independent. | ||
| d. Pareto's model of consumer behavior was developed into the modern theory of consumer demand. |
| a. In the modern, industrial age, competition has destroyed all that was beautiful and virtuous in preceding social and economic structures and is in dire need of accompaniment by a new social ethic. | ||
| b. Regulation of competition is a misleading term that veils the formation of a privileged class of producers. | ||
| c. If one contrasts competition with energetic cooperation in unselfish work for the public good, then even the best forms of competition are relatively evil, while its harsher and meaner forms are hateful. | ||
| d. Economists should take a balanced approach when addressing competition, given that as professionals they have a duty to assess whether unregulated competition would be more harmful than regulated competition. |
| a. Aggregate savings equals aggregate expenditures. | ||
| b. Aggregate income equals aggregate expenditures. | ||
| c. Aggregate savings equals aggregate investment. | ||
| d. Aggregate income equals aggregate investment. |
| a. Aggregate expenditure includes final expenditure for goods and services that have been produced during a given period of time. | ||
| b. Aggregate expenditure includes planned expenditure for goods and services over a given period of time. | ||
| c. Aggregate expenditure includes expenditure on the means of production of goods and services that have been produced during a given period of time. | ||
| d. Aggregate expenditure equals consumption plus investment. |
| a. Central banks should not attempt to control interest rates or the value of a currency, and ideally central banks should not exist. | ||
| b. Governments should not engage in regulation of financial market activities under any circumstances. | ||
| c. Price stability should be the utmost concern of central banks. | ||
| d. A return to the gold standard would be optimal. |
| a. Compared to classical economic thought, neoclassical economic thought came to have a better awareness of the balance between the interests of owners and laborers conducive to economic stability. | ||
| b. Unlike classical economic thought, neoclassical economic thought fully developed and employed the concepts associated with the marginal revolution, such as marginal utility and marginal return. | ||
| c. Neoclassical economic thought came to have a better understanding of business cycles than the understanding held by classical economic thought. | ||
| d. Neoclassical economic thought came to have a better understanding of interest than the understanding held by classical economic thought. |
| a. Because money is made from natural and scarce materials, it is proportionate when lending money to expect more in return for the time spent without its availability for use. | ||
| b. Unlike Plato, Aristotle viewed interest as a way of encouraging wealth distribution across society. | ||
| c. Aristotle agreed with Plato that the introduction of money did not serve to foster a virtuous city-state and would eventually lead to widespread corruption in government and crime in society. | ||
| d. Aristotle considered money to be useful in facilitating exchange as a kind of vessel of value, meaning it held no value apart from that which it carried. Interest was therefore against nature and natural law in that a person should not be charged for something that has no intrinsic value. |
| a. Direct competition with other firms is to be avoided if not prevented. | ||
| b. Information about a firm should be guarded, and the manner in which information is released should be controlled. | ||
| c. A firm should do its best to maintain permanent proprietary control over technology it has developed. | ||
| d. Indirect competition with other firms should be sought out to maintain the efficiency and vitality of a firm. |
| a. Markets must be open, and there cannot be one buyer and one seller that can control prices. | ||
| b. Governments must protect private property and enforce contracts. | ||
| c. Producers must be allowed to hold on to private technology. | ||
| d. Markets must be permeated with truthful information. |
| a. "Thomism" or Thomist thought managed to erase the last vestiges of Aristotelian economic and political thought by securing the determination of value and property distribution in a formal, transcendent realm unaffected by human concerns and interests. | ||
| b. Aquinas was an advocate for returning to an understanding of "just price" as the price determined between buyers and sellers in the common market. | ||
| c. Aquinas attempted to assuage laws against usury in favor of what amounted to a form of commercial investment banking. | ||
| d. Aquinas revitalized the Aristotelian notion of humans as rational beings capable of shaping their own destiny and having a proprietary right over themselves. This self-ownership could be transferred to land through labor and occupation and was the basis for Aquinas's justification of private property. |
| a. Money allows for the accumulation property and wealth beyond personal need in ways that avoid waste. | ||
| b. It has no significant effect except as a matter of convenience in the exchanging of goods to meet needs. | ||
| c. Money allows for the appropriation of things of a certain kind such that it is not necessary to leave for others enough and as good things of the same kind, but only those resources which are enough and as good to allow for human life. | ||
| d. Money allows for people to sell their labor to preserve themselves. By owning the labor of others, vast amounts of resources can be indirectly appropriated. |
| a. Democracy rests on a false sense of equality between human beings and a false sense of freedom to satisfy one's desires. | ||
| b. Democracies tend to be less cautious when it comes to engaging in warfare. | ||
| c. Democracies tend to make inconsistent policy decisions with a short-term view of the future. | ||
| d. Democracy allows for too much in the way of free speech resulting in indecisiveness. |
| a. They both emphasized the importance of the positive sciences such as biology and physics in approaching the field of economics. | ||
| b. They both emphasized the importance of mathematical abstraction to progress in the field of economics. | ||
| c. They espoused the method of successive approximations of theory to the real economy, meaning the progressive introduction into a model of empirically derived considerations to achieve a high degree of realistic detail. | ||
| d. They both argued that although human observations of the physical world were important, they could only be usefully employed after first coming to conclusions using mathematical equations. |
| a. Under a mercantilist system, a country with a successful regime and favorable balance of trade would experience an increase in money stock. This new money would result in higher expenditure on and prevalence of imported goods. | ||
| b. Under a mercantilist system, a country with a successful regime and favorable balance of trade would experience an increase in money stock resulting in inflation. Higher priced, domestically-produced goods would eventually become uncompetitive in comparison with cheaper imports and would lead to an unfavorable balance of trade and flow of money. | ||
| c. Cantillon thought that unfavorable balances of trade could be mitigated, if not avoided entirely, by strong state support for technological advancement. | ||
| d. Cantillon argued in favor of a retractionary monetary stance in advising government to hoard new inflows of specie. |
| a. Ricardo's proof that states protectionism for domestic industry provided a comparative advantage in competition with other countries proved to be an academic buttress for those holding on to a mercantilist framework for state policy. | ||
| b. Ricardo's theory of comparative advantage served as a devastating blow to the notion that state protectionism was necessary to ensure economic growth and the strength of a particular country. | ||
| c. In contrast to the fundamental tenets of mercantilist thought, Ricardo's theory of comparative advantage was revolutionary in showing how economics and, in particular, trade policy need not be approached as a zero-sum game. | ||
| d. Ricardo's theory of comparative advantage could be applied not only to trade policy but to division of labor within a household or on a farm. |
| a. Exchange value is also known as price. | ||
| b. Exchange value is determined by use value, i.e., what something can be exchanged for is determined by the degree to which it is useful. | ||
| c. Exchange value is a measure of what one commodity can be exchanged for in terms of another commodity or basket of commodities. | ||
| d. Exchange value and use value do not necessarily correspond. |
| a. The neoclassical synthesis believes in the use of monetary and fiscal policy to counter distortions created by market activity. Monetarism sees these distortions as the result of incompetent monetary policy, or as natural fluctuations that will return to equilibrium over the long-term. | ||
| b. Monetarism and the neoclassical synthesis both recognize that prices and wages do not adjust very quickly to clear markets. | ||
| c. Monetarism and the neoclassical synthesis both agree that stickiness of prices and wages should be addressed in an economic downturn, but both disagree on how the issue should be tackled. | ||
| d. Monetarism and the neoclassical synthesis both recognize the importance of expectations to investment, but both disagree on what mitigates uncertainty. |
| a. Without capital, people must have immediate returns; otherwise, they will perish. | ||
| b. Capital and labor are one in the same from an owner's point of view. | ||
| c. Capital consists of all useful objects which, in supplying labor's ordinary wants and desires, enable labor to defer the results of work for a greater or lesser period of time. | ||
| d. While the amount of capital is estimated by the amount of deferred utility from its use, the amount of employment of capital is the amount of utility multiplied by the number of units of time during which its enjoyment is deferred. |
| a. Instead of confining marginal utility theory to the investigation of consumption and of simple exchange, Walras's general equilibrium theory analyzed behavior in multiple markets of a variety of participants undertaking different economic functions. | ||
| b. Walras's general equilibrium theory explained how a country with a trade deficit could reach equilibrium through external financing by issuing bonds. | ||
| c. Walras's theory stated that it was only possible for an economy to arrive at a state of general equilibrium from a state of disequilibrium through massive state intervention. | ||
| d. Walras's theory indicated that general equilibrium could only come about under conditions of imperfect competition. |
| a. Any degree of inequality with regard to material resources is acceptable as long as everyone is able to satisfy their basic needs. | ||
| b. Inequalities should only exist to the degree to which they benefit the worst off in society. | ||
| c. Inequalities naturally stem from differences in human beings, with poverty a result of one end of this spectrum of differences. Poverty should be addressed through compassion and charitable works when available. | ||
| d. Regardless of the level or degree of poverty, inequality and poverty must be considered together because of the importance of self-respect. It is likely that those who are worse off than others in a society that has no poverty in terms of basic needs but a high degree of inequality would have difficulty maintaining their self-respect - a characteristic crucial to the functioning of markets in particular and to a good society in general. |
| a. Turgot understood wages as a discount agreed to by workers for receiving present payment rather than waiting for the return on a particular capital investment. | ||
| b. Turgot understood wealth creation as stemming initially from the establishment of a money economy which in turn would allow for savings, investment capital, and profit. | ||
| c. Turgot supported usury laws, arguing that it was inaccurate to say that interest was justified because of the unavailability for use by the lender of money lent to a borrower, given that the lender had no guarantee that the money would have otherwise been put to better use. | ||
| d. Turgot introduced the notion of opportunity cost with regard to savings and investment, meaning that not only must the amount of time be taken into account of how long a capital investment might take before returning a profit but opportunities that must be passed over, given the commitment of resources to a particular project or endeavor, must also be considered. |
| a. His primary approach was utilitarian, meaning his approach to measuring economic growth was focused upon the availability of primary resources as opposed to luxury goods. | ||
| b. He paid particular attention to the economic well-being of the individual in society, regardless of the well-being of a society as a whole. | ||
| c. His primary approach was utilitarian, meaning his approach only employed use value and dismissed exchange value entirely. | ||
| d. He applied a calculus to measure the pleasure and pain of individuals in units called "utils." |
| a. Interpersonal comparisons of utility were not allowed. | ||
| b. Interpersonal comparisons were allowed, but distributional concerns across society were not considered. | ||
| c. There did not appear to be concern for any rights of the individual if respect for a particular right meant a reduction in the overall utility of a society. | ||
| d. It was difficult to objectively assign units of utility to cognitive states of pleasure and pain, or to having such characteristics as integrity, courage, or humility. |
| a. Merchants provided access to goods produced by people of other faiths. | ||
| b. Merchants did not make anything or have any identifiably respectable skills. | ||
| c. Merchants were focused on accumulation of wealth to no greater good; therefore, they were greedy. | ||
| d. The act of buying something at one price and selling it at another price was considered deceitful and fraudulent. |
| a. An economy based primarily in agriculture | ||
| b. An economy based primarily on local self-sufficiency and exchange | ||
| c. A mixed economy that would thrive through a policy of targeted import substitution instituted by each particular state | ||
| d. A loosely-knit Republic deferential to the laws of communities and states |
| a. The measurement of individual pleasure and pain through the use of cognitive psychology | ||
| b. The existence, uniqueness, and stability of general equilibrium as demonstrated through mathematical equations | ||
| c. How to stabilize international financial flows to prevent international financial instability associated with the gold standard | ||
| d. Ways to improve the German economy |
| a. The role of uncertainty is related to future expectations of returns on capital. | ||
| b. The role of uncertainty is the cause of all economic downturns. | ||
| c. The role of uncertainty is relatively easy to control through the dissemination of information; therefore, it is an important instrument for short-run purposes. | ||
| d. Although imprecise, an assessment of the level of uncertainty in an economy is the most telling of all economic indicators. |
| a. Confucius | ||
| b. Lao Tzu | ||
| c. Chuang Tzu | ||
| d. Pao Ching-Yen |
| a. To function as a form of reserve currency in the administration's dealings with growers and traders in the absence of, or in combination with, specie | ||
| b. To accommodate the weather | ||
| c. To ensure domestic stability | ||
| d. To discourage grain consumption and encourage the growth of other crops |
| a. The initial neoclassical synthesis was a term used to denote the consensus view of macroeconomics that emerged in the 1950s. | ||
| b. The neoclassical synthesis viewed the decisions of firms and individuals as largely rational and capable of being studied using standard models from microeconomics. | ||
| c. The neoclassical synthesis was of the view that prices and wages are sticky, meaning they do not clear markets quickly. | ||
| d. The neoclassical synthesis agreed with neoclassical economics that full employment could be expected under a system of laissez-faire. |
| a. Use value is also known as utility. | ||
| b. Use value is determined by exchange value, i.e., what something can be exchanged for serves as an explicit measure of the degree to which it is useful. | ||
| c. Use value corresponds to the physical properties of a commodity, meaning the material uses to which an object can be put and/or the human needs it can potentially fulfill. | ||
| d. Use value and exchange value are important concepts in the thought of both Adam Smith and Karl Marx. |