ECON 2200 Test #3 Study Guide

ECON 2200 Test #3 Study Guide - ECON 2200-Moore Study Guide...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 2200-Moore Study Guide for Test 3 The Reunification Era: Southern Stagnation, Western Expansion & the Industrial Revolution (c. 1865-1920) Money and Banking after the Civil War Rockoff, Hugh, “The Wizard of Oz as a Monetary Allegory,” The Journal of Political Economy , Vol. 98, No. 4, (August 1990), pp. 739-760. Boom and Bust (c. 1920-1946) The Economy of the Roaring Twenties Walton & Rockoff, Chap 22 The Great Depression Below you will find some questions to use as a guide to your studying. While this list is not exhaustive , it does illustrate the types of questions you should be prepared to answer. Be sure to review economic terms/theories, such as: The quantity theory of money High-powered money Elasticity Inflation Deflation Velocity Productivity Aggregate demand 1. Other than metal coins, what types of money circulated in the U.S. in the late 1800s? If the U.S. had a bimetallic standard, why did it operate on a de facto gold standard for most of the late 1800s? When did the U.S. officially adopt a gold standard, and how long did it remain on the gold standard? A. Following the Civil War, money included (=M) SB notes NB notes Greenbacks o A fiat currency issued by the Federal government during the Civil War; it was legal tender (meaning it had to be accepted legally). Demand deposits Coins (bimetallic standard) o Gold o Silver o Recall , under a bimetallic standard, only the metal that is overvalued at the mint will circulate as money. o In the 1870s, silver was worth approximately 3% more on the bullion market that at the mint. Thus, it was a de facto gold standard.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. Use Figures 19.1 and 19.2 to discuss the relationship between the money supply (M) and the price level (P) in the late 19 th century. B. Dominant issue of late 1800s: What kind of monetary system should U.S. have? As we consider this issue, remember: Quantity Theory of Money (Econ Insight 19.1) o Recall , MV = PY 1. In book, k = 1/V. So… M = kPY o o Estimates of M – 19.1 (1860-1915) 1. Different Types of M US notes = Greenbacks Gold National-bank notes Subsidiary and minor coin Silver 2. Why did gold take off around 1895? 3. Why was gold falling around 1862-1868? 4. Why was silver not circulating? o Estimates of P – 19.2 (1860-1915) 1. Why did wholesale prices skyrocket around 1860-1865? Wartime inflation (Civil War) 2. Why did wholesale prices take a tumble around 1870? 3. During the Civil War, the U.S. was forced to suspend payment of specie. Why? What had to happen in order for
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 33

ECON 2200 Test #3 Study Guide - ECON 2200-Moore Study Guide...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online