Mobilizing for War
1. One of the causes of World War I was
a. the deteriorating standards of living in Europe.
b. the assassination in Serbia of Austrian Archduke Ferdinand.
c. Europe had experienced several wars in recent decades that spilled over
into World War I.
d. the European working class was increasingly fractured and nationalistic.
2. What best describes the role of the United States in World War I?
a. The United States entered World War I as soon as it started.
b. The United States was a neutral moderator throughout the war.
c. The United States entered the war on the side of Russia and opposed
d. U.S. business suffered severe financial losses during the war.
3. The United States financed WWI primarily by
a. increasing personal income taxes.
b. increasing corporate taxes and luxury taxes.
c. borrowing from the public.
d. printing new money.
4. Between 1914 and 1920, the U.S. price level
a. fell dramatically.
b. nearly doubled.
c. rose and fell in accordance with intensity of the war.
d. remained relatively stable.
5. The best description of the economic ideology during World War I was.
a. The belief that the economy could be strengthened by centralized
b. The economy would work best with a strong commitment to the free
c. The United States should eliminate many federal agencies during World
War I to make the government more efficient.
6. Which of the following was not a reason why wages in the United States
increased during World War I?
a. a sharp decrease in immigration during the war
b. a large increase in drafting men into the armed forces
c. a large increase in the number of government contracts
d. a large increase in the number of women who were employed in the labor
7. What most accurately describes what happened to earnings in the United
States between 1914 and 1920?
a. Both nominal and real earnings increased substantially.
b. Nominal and real earnings dropped significantly as World War I triggered
c. Nominal earnings increased slightly, but real wages decreased because of
the large inflation.
d. A period of deflation led real earnings to increase even though nominal
earnings had decreased slightly.
8. At the end of World War I, the ___________ outlined in broad terms the
territorial adjustments that should occur in Europe, the extent of the
reparations the losing nations owed, and the general association of nations
that would guarantee each nation’s sovereignty in the future.
a. Treat of Versailles
b. the Fourteen Points
c. the Economic Consequences of Peace
d. the United Nations
9. Robert Higgs argued that which of the following best explained the growth of
“Leviathan” (Big Government)?
a. crises changed fundamental ideologies
c. the decline in organized religion as a provider of aid and relief for the
d. expansion of the right to vote
10. The War Industries Board, headed by Bernard Baruch, performed all of the
following functions except
a. negotiating prices of key industrial products.
b. developing and implementing the bulkline pricing system to determine
industrial prices that maximized output.
c. establishing a ratings system for government contracts.
d. establishing and enforcing minimum wages for manufacturing workers.
1. What best describes the impact of a price ceiling in a competitive market?
a. This benefits all consumers because they are able to obtain the good for a
b. The quantity supplied will be in excess of the quantity demanded.
c. It will likely lead to consumers waiting in line for longer periods of time to
buy the good.
d. It will benefit both consumers and producers of the good.
1. If a government wants to distribute the burden of increased spending onto
future generations it should
a. increase taxes.
b. borrow from the public.
c. print more money.
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