11. TRUE or FALSE The main reason that producers of worsted fabrics in Germany in the late 1500s formed a guild was toimprove the quality of the fabrics that they sold.12. TRUE or FALSE Little innovation took place before the worsted fabric guild was formed.13. The guild had strict rules about how much yarn spinners could be paid for their yarn. Which of the following is NOTcorrect?a. Since spinners were paid a fixed rate, they had an incentive to take their time and spin slowly to ensure qualityyarn was produced.b. If a member of the guild wanted to pay a spinner more (for high quality yarn) they would be breaking the rulesand would have to pay a fine to the guild.c. High profit margins could be enjoyed by some of the guild members.d. Some guild members wanted to be allowed to pay more for quality yarn.14. Markets tended to be highly segmented at the time of the worsted guild. This meant the customers who purchase worsted
fabrics didn’t have many options except what was produced locally. Reasons for the segmented markets include all EXCEPT
which of the following?a. warfare.b. high transportation costs.c. trade barriers.d. government regulations.15. The situation where a guild is formed and is beneficial for members but has negative impacts on consumers and on otherproducers can happen becausea. the benefits are diffuse but the costs are concentrated.b. the benefits and costs are diffuse.c. the benefits are concentrated but the costs are diffuse.d. the benefits and costs are concentrated.
16. TRUE or FALSE In more modern terminology, we’d classify the guild as a special interest group.
17. From an article that you read, there are 4 economies that the US should avoid becoming like. With that in mind, which of the following is correct?a. In France, high government spending has lead to high inflation.b. In Greece, the government has abandoned the euro and is printing too much of the new currency.c. In Japan, the government was too worried about inflation and has implemented policies that stagnated theeconomy.
d. In Zimbabwe, the government’s fiscal situation is imbalanced and debt is piling up.
18. TRUE or FALSE Germany has thriving manufacturing and services sectors.
19. TRUE or FALSE Germany’s professional labor markets are relatively open and competitive.
20. From an article you read, policymakers in the US and in Europe are working on new regulations to prevent situations likethe financial crisis from happening again. What that in mind, which of the following is NOT correct?a. The Dodd-Frank Act is a broad law that directs individual government agencies to create more detailedregulations for the financial sector.
b. In the EU, there isn’t one broad law, but regulations are being passed for each sector one by one.
c. Some experts believe that the US’s approach to this type of regulation is superior to the European approach.
d. The European debt
crisis isn’t being factored in to the regulations in Europe.
21. In which of the following instances is the
of the future payment the largest?a. You will receive $1,000 in 5 years and the annual interest rate is 5 percent.b. You will receive $1,000 in 10 years and the annual interest rate is 3 percent.c. You will receive $2,000 in 10 years and the annual interest rate is 10 percent.d. You will receive $2,400 in 15 years and the annual interest rate is 8 percent.