Problem Set #7. 20 pts. maximum.

Foldvary

Due Friday, October 12

If you attended the Civil Society lecture of October 10, do part A.

Otherwise, do part B. If you wish, you may do both parts A and B for maximum 10 pts. each.

Be prepared to participate in class discussion.

If you neither attended the talk by Dr. Higgs nor attended class on October 10, then contact me for a make-up alternative problem set.

Please either print, type, or write very legibly.

If you work on this together with another student in the class, please indicate that and include all your names.

A. Civil Society lecture by Dr. Robert Higgs on the Great Depression.

1. 4 pts. What was president Roosevelt's "New Deal"? What were the policies?

2. 6 pts. What, according to Dr. Higgs, was the effect of the New Deal policies on enterprise and the depression?

3. 10 pts. Evaluate the presentation of Dr. Higgs. Did he provide evidence? Is his logic valid? Were you able to understand what he said? Did it make sense? Was it interesting?

B. Based on the October 10 class lecture and discussion on business cycles:

4 pts. each maximum.

1. What generally causes national output to decline into a recession?

2. What are the financial causes of economic distortions that lead to a downturn?

3. How is the structure of capital goods involved in the business cycle?

4. What role do real-estate construction and prices play in the business cycle?

5. What monetary and fiscal policies would reduce or eliminate the business cycle?