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midterm-1-111A-solutions - Ecn 111A Economic History of the...

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Ecn 111A - Economic History of the United States University of California - Davis January 30, 2009 Instructor: John Parman Midterm 1 - Solutions You have until 1pm to complete the exam, be certain to use your time wisely. For multiple choice questions, mark your answer on your scantron sheet. Choose only one answer for each multiple choice question; if more than one letter is chosen for a question it will be marked wrong. Write your answers for the essay section directly on the exam. Calculators may not be used. Remember to put your name and ID number on both the exam (in the spaces provided below) and on the scantron sheet. Good luck! Name: ID Number: Section: SECTION I: MULTIPLE CHOICE (60 points) 1. Over the history of the United States, has become less important and has become more important in sustaining overall economic growth. (a) Extensive growth, intensive growth. (b) Extensive growth, growth in the agricultural sector. (c) Growth in manufacturing, growth in the agricultural sector. (d) Productivity advance, growth in land under cultivation. (a) Early economic growth largely came from extensive growth, expanding the amount of land under cultivation and increasing the size of the population. Modern growth is mainly sustained by steady growth in productivity which is a form of intensive growth, getting more and more output out of a unit of input. 2. Living standards in colonial America were: (c) Living standards in colonial times were maintained despite a rapidly growing population because of the availability of additional land. Without this extra land, the increasing population would have led to declining output per worker (due to fixed natural resources). Living standards have risen dramatically since colonial times; income per person is now much higher than it was in the 17th century. 3. Which of the following was not a feature shared by both the early central banking system (the First and Second Banks of the United States) and the modern Federal Reserve System? (a) Both handled the banking needs of the federal government. (b) Both could influence money supply. (c) Both had branch banks throughout the country. (d) Both could set reserve requirements for the banking industry.
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2 Midterm 1 - Solutions (d) The First and Second Banks of the United States did not have many of the official regulatory powers enjoyed by the modern federal reserve. While the banks had some ability to regulate banks through their role as a net creditor to the banking industry, they did not have the power to officially set reserve requirements.
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