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Topic 8 Austrian Economics

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Topic 8 Austrian Economics

    Topic 8: Austrian Economics

    1. The subjective approach to pricing advocated by Austrian economists suggests that:

    (a) the value of anything equals its cost of production. (b) prices should be set by

    the government. (c) the value of anything is whatever someone is willing to pay for

    it. (d) prices should be determined by voting.

    2. The English poet Samuel Butler‟s assertion that “The value of a thing is just as much

    as it will bring” is most compatible with: (a) Austrian economic theory. (b) German

    historicism. (c) John Locke‟s theory of property rights. (d) Adam Smith‟s theory of

    the invisible hand. (e) Aristotle‟s Nichomachean Ethics.

    3. According to David Ricardo, differences in land rents depend on differences in

    fertility. Johann H. von Thünen instead argued that land rents depend far more on: (a)

    the aesthetics of the scenery. (b) location. (c) population density. (d) subjective

    evaluations.

    4. David Ricardo believed that land rent depends chiefly on relative fertility. Johann H.

    von Thünen argued, instead, that the most important determinant of rent is: (a)

    population density. (b) aesthetic attractions. (c) location. (d) subjective individual

    values.

    5. A very early Austrian economist now credited with developing or elaborating early

    (and sometimes crude) versions of a number of important aspects of modern theory,

    such as the concepts of economic rent, diminishing returns, opportunity costs, the

    marginal productivity theory of wages, and the economic theory of location was: (a)

    Friedrich von Wieser. (b) Karl Marx. (c) Jules Dupuit. (d) Johann von Thünen. 6. A theory that helps explain why land costs more in downtown Paris than in the

    French countryside was developed by: (a) Thomas Malthus. (b) David Ricardo. (c)

    Johann H. von Thünen. (d) François Quesnay.

    7. A real estate agent who loudly proclaims that property values depend on “first,

    location; second, location; and third, location,” is echoing a theory formalized into a

    mathematical equation by the pioneering economic thinker: (a) David Ricardo (b)

    Henry George. (c) Johann von Thünen. (d) William Stanley Jevons. (e) William Petty.

    (f) Edmund Burke.

    8. Of the following schools of economic philosophy, the least hostility to the notion that

    interest is a legitimate stream of income was expressed by: (a) classical Greek

    philosophers. (b) medieval scholastics. (b) early Arabic-Islamic social philosophers.

    (c) anarcho-syndicalists. (d) Marxists. (e) early Austrian “marginalists.”

    9. Of the following economic thinkers, the one who was least hostile to the notion that

    interest is a legitimate stream of income was: (a) Thomas Aquinas. (b) Aristotle. (c)

    Ibn Kaldur. (d) Karl Marx. (e) Carl Menger.

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    10. Losche concluded that the distance-minimizing geometric shape of the territories

    most firms control when concentrated in a high traffic area for business is a: (a)

    triangle. (b) oval. (c) quadrilateral. (d) hexagon. (c) octagon.

    11. One of Hans K.E. von Mangoldt‟s key contributions to economics was his

    differentiation between ______ and ______, which hinges on the notion of risk

    taking. (a) the interest rate, the rate of return on capital (b) consumer surplus,

    producer surplus (c) laborers, business owners (d) capitalists, entrepreneurs 12. Hans K.E. von Mangoldt believed conflict, including wars, to potentially be very

    productive. He liked conflict and change as a mechanism for creation. Another

    economist who felt conflict was crucial to change was: (a) Joseph Schumpeter. (b)

    John Bates Clark. (c) Karl Marx. (d) William Stanley Jevons.

    13. An economist who contended that war provides great opportunities for entrepreneurs

    to create new technologies was: (a) Richard Cantillon. (b) Joseph A. Schumpeter. (c)

    Hans K.E. von Mangoldt. (d) John Bates Clark. (e) Friedrich List.

    14. The theorist most likely to agree with the statements: “Wars stimulate technological

    advance,” and “History favors the bold,” would be: (a) Hermann Gössen. (b) Jules

    Dupuit. (c) Hans K.E. von Mangoldt. (d) Augustin A. Cournot.

    15. Hans K.E. von Mangoldt was a pioneer in arguing that human progress arises

    primarily from: (a) entrepreneurial innovation. (b) conflicts between socio-economic

    classes. (c) expansion of the production data base. (d) a tiny elite group of inventors. 16. Hans K.E. von Mangoldt characterized entrepreneurial profits as the reward for a

    range of activities including which of the following: (a) finding particular markets. (b)

    clever acquisitions of productive agents. (c) smart combination of factors of

    production on the right scale. (d) sales policy and innovation. (e) all of the above. 17. A belief shared by Richard Cantillon and Hans K.E. von Mangoldt is that: (a)

    interest rates are unnecessary. (b) demand creates its own supply. (c) large profits

    are justified because entrepreneurs are willing to take risks. (d) workers should be

    paid more than a subsistence level of wages. (e) the price level is precisely

    proportional to the quantity of money in an economy.

    18. The least likely of the following economists to have viewed entrepreneurs as creeps

    was: (a) Joan Robinson. (b) Thorstein Paul Veblen. (c) Paul Sweezey. (d) Hans K.E.

    von Mangoldt.

    19. Numerous Austrian economists differ with the neoclassical macroeconomic model

    by emphasizing the idea that: (a) supply creates its own demand [Say‟s law]. (b)

    wages, prices, and interest rates are flexible. (c) the entrepreneur is the pivotal agent

    in economic growth and development. (d) MV= PQ.

    20. A school of thought containing several members who focused their analysis heavily

    on the long run beneficial roles played by entrepreneurs is: (a) Austrian economics.

    (b) institutionalism. (c) Marxism. (d) monetarism.

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    21. The Austrian School of economic thought is widely acknowledged to have been

    born in the writings of: (a) Joseph Schumpeter. (b) Leon Walras. (c) Carl Menger.

    (d) Friedrich von Wieser. (e) Otto von Bismark.

    22. Carl Menger‟s Principles was intended as a refutation of the school of thought

    known as: (a) German historicism. (b) marginalism. (c) neoclassicism. (d)

    Keynesian theory. (e) logical positivism. (f) praxeology.

    23. The idea that the value of a product depends primarily on the amount a consumer is

    willing to pay for it was embraced by: (a) Adam Smith, a Scot. (b) Carl Menger, an

    Austrian. (c) Francois Quesnay, a Frenchman. (d) Richard Cantillon, an Irishman

    who also held French citizenship. (e) Aristotle and other early Greek philosophers. 24. Adam Smith and Carl Menger agreed that the government‟s involvement in the

    economy should be very limited. However, Menger and his Austrian colleagues

    probably believed this in part because they perceived markets to be efficient, and in

    part because: (a) they believed in the power of the invisible hand as a mechanism

    that would overcome raw political power. (b) most were born into the politically-

    conservative Austrian or German aristocracy. (c) they were early libertarians who

    emphasized freedom above all else. (d) they viewed all government activity as

    inherently socialistic. (d) they were quite liberal politically and favored worker

    participation in managerial decisions, and thought individuals should be able to

    participate in a free market system.

    25. Carl Menger and other early Austrian theorists were most vehemently opposed to:

    (a) socialism. (b) unrestricted international trade. (c) libertarianism. (d) war as a

    mechanism for solving international issues. (e) laissez faire capitalism. 26. The theorist who expanded upon Carl Menger‟s earlier assertions about pricing with

    a basic statement of the general law of value and who also invented the term

    “marginal utility” was (a) Eugen von Böhm-Bawerk. (b) H. K. E. von Mangoldt. (c)

    Friedrich von Wieser. (d) Antoine-Augustin Cournot.

    27. The Austrian theorist who coined the term marginal utility though he called it

    grenznutzen was: (a) Carl Menger. (b) Johann H. von Thünen. (c) Friedrich von

    Wieser. (d) Hans K.E. von Mangoldt. (e) Eugen von Böhm-Bawerk.

    28. Friedrich von Wieser is most renowned for his elaborations and extensions of the

    theories of: (a) Hermann H. Gössen, by grounding the theory of consumption in the

    marginal principle. (b) Carl Menger‟s ideas on utility, value, and input-output. (c)

    Antoine Augustin Cournot‟s law of demand. (d) Jules Dupuit, in his theories

    29. The phrase “marginal utility” was coined by the Austrian economist: (a) Carl Menger.

    (b) Eugen von Böhm-Bawerk. (c) Friedrich von Wieser. (d) Jules Dupuit. 30. Applications of marginal utility to the theory of demand first appeared in the work of

    A. Jules. E. Dupuit. The Austrian economic theorist who, until recently, erroneously

    received credit for originating the analysis of demand using the concept of marginal

    utility was: (a) Johann H. von Thünen. (b) Hans K.E. von Mangoldt. (c) Carl Menger.

    (d) Hermann Gössen. (e) Friedrich von Wieser.

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    31. An Austrian economist focused primarily on capital accumulation and

    “roundabout” production was: (a) Carl Menger. (b) Von Wieser. (c) Eugen von

    Bohm-Bawerk. (d) William Stanley Jevons. (e) Jules Dupuit.

    32. The concept of roundabout production entails: (a) maximization of the production of

    capital goods during each production period. (b) investing in capital goods by

    postponing consumption, thereby enabling the production of greater amounts of

    consumer goods in the future. (c) outsourcing of intermediate goods by a firm that is

    not fully integrated. (d) maximizing r + i + π = surplus value.

    33. Eugen von Böhm-Bawerk‟s Capital and Interest. (German, 1884) criticized

    socialists‟ exploitation theories of interest and profit as unscientific and incorrect. He

    termed the exploitation doctrine: (a) the “Worst Fallacy.” (b) “Pathetic

    Obscurantism.” (c) “Hypocritical Dogma.” (d) “Economic Theology.” (e) “Nattering

    Nabobbery.”

    34. Eugen von Böhm-Bawerk extensively researched and published a three-volume set of

    books that focused primarily on: (a) national income and unemployment (b) marginal

    utility and Aggregate Demand. (c) capital and interest. (d) economic equity and

    efficiency. (e) inflation and the quantity theory of money.

    35. Eugen von Böhm-Bawerk‟s contributions to economic theory did not include the

    notion that: (a) capital reproduces itself [i.e., it “breeds”]. (b) demand is based on

    marginal utility. (c) interest is a reward for postponing production. (d) economic

    capital facilitates increased output through “roundabout production”.

    36. In The Positive Theory of Capital, Eugen von Böhm-Bawerk elaborated a theory of

    interest based on the notion that current goods are subjectively worth more than

    future goods of the same kind. This theory suggests that an individual will prefer:. (a)

    $1 today over $1 tomorrow. . (b) $1 next year over $1 this year. . (c) $3 next year

    over $1 yesterday. (d) $20 in 1950 over $200 in 2004.

    37. Eugen von Böhm-Bawerk suggested that the production period should be measured

    as an: (a) average production period where inputs are weighted according to their

    proximity to point outputs. (b) absolute production period where length of production

    is measured from beginning to the end. (c) approximate point production period

    where a certain point in production is picked to determine what the production period

    may be.

    38. According to Eugen von Bohm-Bawerk , among factors that determines the interest

    rate is: (a) average preferences for goods now over goods in the future. (b) the

    interest rate on treasury bonds. (c) the FED‟s open-market operations. (d) the

    condition of the stock market.

    39. The thinker who would most strongly have disagreed with a statement that

    “charging interest on loans is unethical because loans do not facilitate the

    production of valuable goods” would have been: (a) Karl Marx. (b) Eugen von

    Böhm-Bawerk. (c) Thorstein Veblen. (d) Aristotle. (e) Thomas More.

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40. According to Eugene von Böhm-Bawerk, the “province of the Austrian economist”

    is: (a) theory. (b) history. (c) utility. (d) calculus.

    41. The theory of interest was not among areas in which significant contributions were

    made by: (a) Eugen von Böhm-Bawerk. (b) Frank H. Knight. (c) Knut Wicksell. (d)

    David Ricardo. (e) Herbert Spencer.

    42. The economist least closely associated with Carl Menger and the Austrian school

    would be: (a) Alfred Marshall. (b) Friedrich von Wieser. (c) Eugene Böhm-Bawerk.

    (d) Ludwig von Mises. (e) Joseph Schumpeter.

    43. Austrian economics is fundamentally opposed to the measurement concept

    pioneered by the mercantilist thinker William Petty because, in the Austrian view:

    (a) aggregated economic statistics are flawed because of biases in reporting, among

    other difficulties. (b) economic statistics must be used to support good abstract

    theories. (c) good abstract theories must be consistent with historical events. (d)

    effective macroeconomic planning depends on solid statistical analysis. 44. Members of the Austrian school of thought do not: (a) focus on the subjective

    nature of demand. (b) view the supply of capital as positively related to the interest

    rate. (c) assume that people act in purposeful ways to accomplish their goals. (d)

    view Joseph Schumpeter and Eugen von Böhm-Bawerk as its founders. (e) ever use

    calculus to illustrate their models.

    45. One foundation of Austrian economics is radical subjectivism, which does not

    include an assumption that: (a) entrepreneurial decision-making lies at the heart of

    innovation. (b) human choice is the foundation of permanent relations. (c) people

    typically share uniform knowledge and expectations about market conditions. (d)

    knowledge and interpretations form the basis for and individual‟s tastes and

    preferences.

    46. Austrian economics departs most sharply from neoclassical value theory. (e.g.,

    Jevons and Marshall) on assumptions about: (a) marginal utility. (b) opportunity

    costs. (c) maximization processes. (d) the subjectivity of utility. 47. Among distinguishing features of Austrian economics is an assumption that human

    action is purposiveindividuals make decisions with goals in mind, even though

    sometimes frustrated by errors and imperfect knowledge. This idea is least

    consistent with the view of behavior expressed by: (a) William Stanley Jevons. (b)

    Alfred Marshall. (c) Joseph Schumpeter. (d) Jeremy Bentham.

    48. The entrepreneur is the chief agent of change in a competitive economy, or the

    persona causa of economic development,” according to the Austrian economist: (a)

    Joseph A. Schumpeter. (b) Ludwig von Mises. (c) Friedrich A. Hayek. (d) Oskar

    Morgenstern.

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    49. An economist who followed in the tradition of Richard Cantillon and Hans K.E.

    von Mangoldt in glorifying entrepreneurs as the driving forces in economic

    development, and who also suggested that as democracy increases, socialism will

    tend to displace capitalism, was: (a) Johann H. von Thünen. (b) Ludwig von Mises.

    (c) Friedrich Hayek. (d) Jon von Neumann. (e) Wernher von Braun. (f) Claudius

    von Disputandum. (g) Joseph Schumpeter.

    50. Capitalism continually revitalizes itself through creative destruction, in which

    entrepreneurial innovations obliterate obsolete technologies and institutions and

    pave the road to progress, according to the writings of: (a) Joseph A. Schumpeter.

    (b) Herbert Spencer. (c) John R. Commons. (d) William Stanley Jevons 51. One Austrian economist, when young, agreed to head a commission to study the

    nationalization of industry for the newly socialist German government. When

    questioned about how someone who so praised capitalism and individual enterprise

    could take part, he answered, “If someone wants to commit suicide, it is a good

    thing if a doctor is present.” He was: (a) Carl Menger. (b) Friedrich von Wieser. (c)

    Eugen bon Böhm-Bawerk. (d) Joseph Alois Schumpeter. (e) Friedrich List. 52. In Joseph Schumpeter‟s The Theory of Economic Development, business cycles and

    irregular economic growth are described as among the consequences of: (a)

    technical and financial innovations of entrepreneurs. (b) erratic growth of the

    money supply. (c) class conflict. (d) overinvestment in capital. (e)

    underconsumption caused by inequality in the distribution of income. 53. Joseph Schumpeter‟s principle of creative destruction is not exemplified by: (a) the

    loss of secretarial jobs after the advent of computing. (b) the growth of tire and oil

    industries after the invention of the internal combustion engine. (c) the emerging

    obsolescence of VHS. (d) the concentration of industry in large multinationals. 54. The idea that capitalism cannot survive in the long run is a central conclusion in the

    theories of Karl Marx and: (a) Joseph Schumpeter. (b) Carl Menger. (c) Thorstein

    Veblen. (d) Eugen von Böhm-Bawerk. (e) Friedrich Hayek.

    55. Karl Marx and Joseph Schumpeter had very different perceptions about the virtues

    of capitalism, but their views are in accord in predicting that: (a) social forces will

    cause capitalism to be replaced by socialism. (b) economic progress depends on

    ambitious entrepreneurs. (c) the working class will eventually resort to armed

    conflict to overthrow the government. (d) the gold standard was doomed by

    unavoidable inflationary pressure.

    56. Most modern economists would identify as the world‟s two most influential

    economic theorists over the period 1900-1950 to have been: (a) John Maynard

    Keynes and Joseph Schumpeter. (b) Joan Robinson and Edwin Chamberlin. (c)

    Ludwig von Mises and Thorstein Veblen. (d) John Commons and Wesley Clair

    Mitchell.

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    57. Which set of economists is out of chronological order? (a) Ricardo / Marx / Jevons /

    Veblen (b) Mandeville / Smith / Walras / Keynes. (c) Malthus / Mill / Edgeworth /

    Fisher (d) Hume / Aquinas / Marshall / Schumpeter.

    58. The “Socialist Calculation Debate” refers to a disagreement between Austrian

    theorists and advocates of socialism about whether capitalism: (a) must eventually

    evolve into socialism. (b) or socialism allocates resources more efficiently. (c) or

    socialism is more compatible with maximizing freedom. (d) is a necessary stage in

    the long run transition to socialism. (e) yields more rapid economic growth than

    would socialism.

    59. Ludwig von Mises disagreed with the neoclassical conclusion that “money is a

    veil,” arguing that inflation: (a) drives up the transaction costs of international trade.

    (b) is an uneven process that disrupts planning by consumers and business investors.

    (c) offsets wage-price stickiness, facilitating equilibration of relative prices. (d)

    confuses people about the real value of money in the market period.

    60. Ludwig von Mises rejected the neoclassical conclusion that “money is a veil,”

    arguing instead that: (a) the money supply directly impacts natural resources. (b)

    inflation matters because it is uneven and causes uncertainty (c) uneven foreign

    exchange rates reduce the gains from international trade. (d) a barter system is more

    efficient than a monetary system.

    61. The Austrian economist least single-mindedly focused on microeconomic aspects of

    resource allocation was: (a) Ludwig von Mises. (b) Carl Menger. (c) Gossen. (d)

    Leon Walras. (e) Friedrich von Wieser.

    62. Austrian monetary theory and Austrian value theory were first reconciled and most

    completely integrated by: (a) Carl Menger. (b) Ludwig von Mises. (c) Thorstein Veblen.

    (d) Murray Rothbard.

    63. Austrian economists view costs as all of the following EXCEPT: (a) a decision. (b)

    subjective. (c) perceived by the chooser. (d) an event or thing. (e) subordinate to utility. 64. The view that events affect costs is contrary to the ideas of: (a) Austrian economics. (b)

    Walrasian general equilibrium. (c) Joan Robinson‟s theories of oligopoly. (d)

    Marshallian partial equilibrium analysis. (e) Keynesian macroeconomics. (f) Marxist

    theory. (g) public choice analysis.

    65. Joseph Schumpeter‟s version of the Austrian school of economic thought emphasizes

    that major disruptions to "purely" competitive markets arise from: (a) profit

    maximization by imitative firms. (b) entrepreneurial innovations. (c) job training by

    workers. (d) laissez-faire government policies.

    66. Not one of Schumpeter‟s three corresponding pairs of opposites would be: (a)

    entrepreneurship vs. management. (b) static vs. dynamics. (c) circular flow vs.

    change in economic routine. (d) evolution vs. determinism.

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    67. The economist who became finance minister of the Austria while quite young,

    emigrated to the United States to avoid Hitler, and who was a student of Eugen von

    Böhm-Bawerk was: (a) Joseph Schumpeter. (b) Max Weber. (c) Claude Levi-Strauss.

    (d) Arthur C. Pigou.

    68. Emerging modern theories of how a backward economy can shift to a path of

    dynamic growth rely most heavily on insights into entrepreneurship and capitalism

    written by: (a) Irving Fisher. (b) Joan Robinson. (c) Joseph A. Schumpeter. (d) John

    Bates Clark. (e) Leon Walras.

    69. The writer who described capitalism as a process of creative destruction and called

    the entrepreneur “the white hot fire that drives capitalism forward” was (a) John

    Stuart Mill (b) Carl Menger. (c) St. Thomas Aquinas. (d) Joseph A. Schumpeter. (e)

    William Stanley Jevons.

    70. According to Joseph Schumpeter, entrepreneurs who launch major innovations spark

    economic activity primarily by stimulating: (a) huge profits for capitalists. (b) related

    inventions and innovations, and new industries. (c) long waves. (d) business

    optimism. (e) monopoly power that exploits workers, thereby accelerating investment

    by capitalists.

    71. Important works by Joseph Alois Schumpeter do not include: (a) Capitalism, Socialism,

    and Democracy. (b) Individualism and Economic Order. (c) A History of Economic

    Analysis. (d) The Theory of Economic Development.

    72. In Business Cycles. (1939), Joseph Schumpeter argued that innovations tend to be

    bunched at certain times one leading to another creating large _________ booms

    that promote long periods of prosperity.: (a) productivity. (b) capital spending. (c)

    consumer spending. (d) savings. (e) investment.

    73. Joseph Schumpeter‟s theory of creative destruction the idea that the discovery of new,

    beneficial technologies will also result in the loss of jobs and equipment in obsolete

    industries was viewed by Schumpeter as one of the prices we pay for the dynamic

    progress possible under: (a) capitalism. (b) Marxism. (c) socialism. (d) libertarianism.

    (e) industrialism.

    74. Joseph Schumpeter‟s theory that capitalism continually revitalizes itself by replacing

    old products, technologies, organizations, and leaders with new is known as: (a)

    creative response. (b) economic replacement. (c) creative destruction. (d) economic

    displacement. (e) creative renewal.

    75. Schumpeter believed the success of capitalism in producing massive amounts of goods

    and services would ultimately result in: (a) explosive business cycles in post-modern

    capitalist economies. (b) ever-increasing concentration in capital-intensive industries. (c)

    the gradual erosion of entrepreneurship and eventual triumph of socialism. (d) ever

    worsening immiseration of workers. (e) sudden “shocks” in oversupplies of goods and

    services.

    76. The term “creative destruction” was used by Schumpeter when celebrating the virtues

    of: (a) socialism. (b) libertarianism. (c) monopolies. (d) capitalism.

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    Important works by Joseph Alois Schumpeter do not include: (a) Capitalism, Socialism, and 77.

    Democracy. (b) The General Theory of Employment, Interest and Money. (c) The Theory of

    Economic Development. (d) A History of Economic Analysis. (e) Business Cycles.

    78. Say that, after examining the writings of Jules Vern and the life of Jacques Cousteau,

    we advance a theory of exploration stating that it is only those daring few

    adventurous spirits (Ferdinand Magellan, Sir Edmund Hillary, Neil Armstrong) who

    expand the environments which humans are bold enough/able to inhabit. This theory

    of exploration (let‟s call it the “Growth in Habitable Environments Theory”) is most

    similar to the theory of economic growth associated with: (a) Adam Smith. (b)

    Joseph Schumpeter. (c) endogenous growth theory. (d) Robert Merton Solow. (e)

    John Stuart Mill.

    79. Which person below would George Gilder probably most admire for his vision of a

    changed world? (a) George Bush for fighting terrorists. (b) Sadam Hussein for

    rallying al Qaeda and refusing to step down. (c) Bill Gates and his vision of

    Microsoft software being used in every home. (d) Donald Trump for his vision of a

    real estate empire.

    th80. A 20 century debate between Keynes and Schumpeter about desirable roles for

    government echoed positions from earlier schools of thought. Keynes‟ perception of a

    need for government stabilization reflected calls for market management voiced earlier

    by __________. Similarly, Schumpeter‟s reliance on freedom and entrepreneurship.

    (although he recognized its dangers) is reflected in __________.: (a) classical

    economics / institutionalists. (b) historicists / Ancient Greeks. (c) classical economics /

    scholastics. (d) scholastics / socialists. (e) the Ancient Greeks / neoclassical economics. 81. The second-generation Austrian economist who was a teacher of Friedrich Hayek

    was: (a) Ludwig von Mises. (b) Fritz Machlup. (c) Joseph Schumpeter. (d) Ludwig

    Lachmann.

    82. NOT one of the five major points that distinguish Austrian economics from

    mainstream neoclassical analysis is: (a) radical subjectivism. (b) methodological

    essentialism. (c) casual-geneticism. (d) methodological individualism. (e) societal

    purpose.

    83. Basic to the Austrian approach is the conviction that all underlying permanent

    relations of economic theory are consequences of: (a) societal patterns. (b)

    consumer needs. (c) demand theory. (d) market demand. (e) human choice. 84. The Austrian concept least congruent with the strict Marshallian tradition would be

    the idea that: (a) costs are subjective. (b) prices are objective. (c) general

    equilibrium analysis is more incisive and insightful that partial equilibrium analysis.

    (d) the consumer has total power over market prices.

    85. Austrian economists would probably disagree most vigorously with the basic

    methodology and premises of the philosophy of: (a) Immanuel Kant. (b) William

    Stanley Jevons. (c) Aristotle. (d) Jeremy Bentham. (e) Carl Menger. (f) Aristotle

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    86. A feature of Ludwig von Mises‟ version of Austrian money theory distinguishing it

    from theories advanced earlier by John Locke and David Hume is his: (a)

    recognition of the uniqueness of money to facilitate immediate exchange [spot

    markets]. (b) view that, in general equilibrium, money is indistinguishable from

    non-money goods. (c) observation that money is unique in its intertemporal

    exchangeability. (e) theory assumes that money is worthless due to the volatility of

    its value.

    87. Ludwig von Mises did not cite as a source of the value of money: (a) subjective

    perceptions of money as having value. (b) the goods it can buy. (c) the interest it

    can generate. (d) the question is misleading because von Mises did not address the

    value of money.

    88. Ludwig von Mises called the characteristic ability of money to be exchanged for

    other things, money‟s (a) subjective exchange value. (b) objective exchange value.

    (c) solitary exchange value. (d) neutrality exchange value. (e) transaction exchange

    value.

    89. Ludwig von Mises claimed that there is a failure “to explain the mechanism of

    variations in the value of money” in the: (a) game theory approach to monetary

    exchange. (b) quantity theory of money. (c) Ricardian theory of money. (d) utility

    theory of money. (e) scholastic theory of money.

    90. The theoretical attack launched by Austrian economists in the 1920s against central

    planning and socialism in the USSR was initially spearheaded by: (a) Friedrich

    Hayek. (b) H. L. Mencken. (c) Ludwig von Mises. (d) Iosif Djugashvili. (e) Lev

    Davidovitch Bronstein. (f) Vladimir Ulyanov.

    91. Ludwig von Mises‟ theory of money set the stage for Friedrich Hayek to develop

    his: (a) monetary analysis. (b) valuation analysis. (c) dynamic analysis (d) theory of

    business cycles. (b) natural rate hypothesis.

    92. Friedrich Hayek argued that equilibrium in capital markets results from interactions

    between the activities of: (a) stockholders and bondholders. (b) savers and investors.

    (c) lender and borrowers. (d) managers and unions.

    93. The economist would have been considered part of the “Vienna circle” along with

    Ludwig von Mises would be: (a) Carl Menger. (b) Joseph A. Schumpeter. (c) Karl

    Marx. (d) Gustav Schmoller. (e) Werner Erhardt.

    94. Austrian economists identified five major points that distinguished Austrian

    economics from mainstream neoclassical analysis. The assertion that Austrian

    economics emphasizes essences rather than functional relationships is called: (a)

    radical subjectivism. (b) purposiveness in human action. (c) methodological

    individualism. (d) casual geneticism.

    95. The school of thought that embraces the ideas of methodological individualism and

    radical subjectivism as keys for relevant economic analysis is: (a) Keynesian theory. (b)

    modern monetarism. (c) Austrian economics. (d) neoclassical monetarism.

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