What are the 2 reasons rGDP has tended to converge in the US? Explain them.
Labor Migration - equilibrium will ensue because of the "osmosis" of labor migrants from low to high wage regions. This is called Wage Convergence
Capital Migration - as capital leaves, the demand for labor decreases, as capital increases the demand for labor increases
Capital Migration - as capital leaves, the demand for labor decreases, as capital increases the demand for labor increases
What was the "Eastern bank monopoly"? Why was there no such thing?
farmers thought they were conspiring to charge them higher interest rates for lending. Farmer's debt was increasing due to increased purchases of land and capital.
Rates are inherently higher for farmers b/c there is more chance of default.
Rates are inherently higher for farmers b/c there is more chance of default.
What did the Wabash case prove? What was created because of this?
It found that while the state could not regulate the rates of Railroads, the Railroads were in violation of the Interstate commerce clause.
So, the Interstate Commerce Commision was created in 1887 and became the first federal regulatory commission.
So, the Interstate Commerce Commision was created in 1887 and became the first federal regulatory commission.
What was the main goal of the Greenback movement? What were the two reasons they thought it would help?
The main goal was "Reflation." They wanted to print money like what was done during the Civil war to create inflation so farmers would have less money-value to pay back. They also thought this would increase the price of farm products which would lead to more money in farmer's pockets.
Would "Reflation" actually have helped borrowers? Would it help to increase the price of farm products?
Yes...in the short term. Increasing the amount of money in the market is good for borrowers that are mid-loan because they will have less money-value to pay back. But when their loan was over and they got a new one, the lenders would compensate by increasing the rate of the new loan.
Yes, but the price of farm products will rise more slowly than the price of everything else, which would still result in adverse terms of trade for farmers.
Yes, but the price of farm products will rise more slowly than the price of everything else, which would still result in adverse terms of trade for farmers.
What did the "Alliances" support (4 things)? How much support did they receive?
1) Reflation
2) Government regulation of big business and monopolies
3) Government ownership of Railroads and communication facilities
4) Federal Government extension of low-interest loans to farmers with surpluses and land as collateral
They received very little support from voters or Congress.
2) Government regulation of big business and monopolies
3) Government ownership of Railroads and communication facilities
4) Federal Government extension of low-interest loans to farmers with surpluses and land as collateral
They received very little support from voters or Congress.
The "Alliances" and the Populist party shared some common beliefs like reflation government control of big-business. What additional goals did the Populist party have (two things)?
1) Government ownership of banks and control of money supply
2) Government ownership of firms that compete with private firms in key industries
2) Government ownership of firms that compete with private firms in key industries
Flashcard set info:
Author: savhighsmith
Main topic: Business Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 15.09.2010
Tags: Myra Moore 2010 Fall
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