Question

Instructions:

All questions are short answer in nature. Provide short explanations (3 to 4 lines)

for each answer

1. Under the economics of fascism (or corporatism), which individuals, organizations, or groups

retain the three aspects of property rights that we have discussed in class: control of use of

assets; claim on net income from use; and transferability.

2. Under the overproduction hypothesis, how does increased productivity cause excess goods and

reduced employment?

3. Adam Smith, when discussing the widespread increased productivity from specialization,

wrote: “He supplies them abundantly with what they have occasion for, and they accommodate

him as amply with what he has occasion for, and a general plenty diffuses itself through all the

different ranks of society.” How does this contrast with the overproduction view of an

economy?

4. Was industrial policy as exemplified by the National Industrial Recovery Act consistent with

the overproduction/underconsumption hypothesis of Rexford Tugwell and others?

5. With an unexpected contraction in the money supply, how might prices and aggregate output

adjust in the short run?

Answer 1