U.S. Economic History Practice Flashcards

Comprehensive practice flashcards featuring key economic concepts, institutions, dates, metrics, and legal milestones from U.S. economic history.

George Washington's Manufacturing Argument

The argument that developing a domestic manufacturing base for economic self-sufficiency is essential for national security.

Bessemer Process

An industrial manufacturing method that allowed for the mass production of strong and affordable steel.

World War II Manufacturing Productivity Growth

The growth rate of American manufacturing productivity during World War II, which reached an all-time peak of $2.51\%$.

Early Railroad Financing

Heavy dependence on large external financing and securities manipulation caused by high fixed costs but low initial profitability.

Erie Canal

A major infrastructure waterway whose primary impact on New York City was increased economic growth.

High-Speed Internet and Broadband Connectivity

Telecommunications technology that expanded commercial business operations by providing increased global reach.

Chain Stores

A retail business model that grew in popularity by offering a wide range of goods and services.

U.S. Ocean Vessel Tonnage (World War II)

The share of worldwide ocean vessel tonnage owned by the United States during World War II, totaling $60\%$.

Intersectoral Labor Transfer

The transfer of labor from agriculture into manufacturing and services, which was a key factor in increasing American labor productivity.

Urban Mass Transit Networks

Municipal transit systems in growing cities whose main impact was increased urban sprawl and expanded commuting options for workers.

Kerosene

A fuel introduced into American households that replaced whale oil and coal for less costly illumination.

Motion-Picture Industry Advancements

Technological improvements in early cinema that increased industry output by $8.7\%$ annually.

Automobile Production Leadership (1929)

The United States, which had the highest production of automobiles in the world by 1929.

19th-Century Telegraph

A communications breakthrough that contributed to economic development by enabling rapid long-distance communication for the first time.

Hartford Electric Light Company

A utility company in the late 1880s that resolved the AC/DC conflict by using direct current ($\text{DC}$) for local distribution and alternating current ($\text{AC}$) for long-distance transmission.

Federal Highway Act of 1916

The first federal statute to prohibit tolls on roads and highways receiving federal funds.

Trademark Act of 1881

Federal legislation enacted to protect commercial brands from infringement and support product differentiation.

Refrigerated Train Cars

Rolling stock innovations that transformed the meatpacking industry in the late 19th century by allowing centralized slaughterhouses and reducing the need for local facilities.

U.S. Steel

The massive industrial corporation created by financier J. P. Morgan after purchasing Carnegie Steel.

Finance-Capitalism

A financial orientation emerging in the mid-1800s focused on mergers and acquisitions, stock prices, and financial manipulation.

Real Interest Rate

The nominal interest rate minus the rate of inflation; for example, a $4\%$ nominal rate with $6\%$ inflation yields a real rate of $-2\%$ per year.

Abandonment of the Gold Standard

The policy action implemented in 1971 under President Richard Nixon that officially ended the convertibility of the U.S. dollar into gold.

U.S. Gold Standard Era (1873–1913)

The historical era in which the United States operated on a gold standard rather than a fiat-money standard.

Central Banks in U.S. History

The total number of central banks the United States has had throughout its history, which is three.

First Commercial Bank in the U.S.

The earliest commercial banking institution established in the American colonies or United States, which opened in 1782.

U.S. Private Savings Rate Trends

The historical pattern where personal savings increased in the 19th century, remained high until the 1970s, and decreased after the 1970s.

Velocity of Money

The speed at which money circulates; it must increase if the aggregate price level rises while real output (real GDP) and the money supply remain constant.

1929 Gold-to-Silver Purchasing Ratio

The purchasing ratio where 37 silver coins (costing approximately $\$0.55$ per ounce, disregarding decimals) were required to purchase one ounce of gold priced at $\$20.69$.

Bretton Woods Agreement (1944)

An international accord established primarily for the promotion of international trade and economic cooperation.

Financial Intermediary Exclusions

Entities that facilitate transactions but do not act as financial intermediaries, exemplified by the New York Stock Exchange.

Security vs. Real Estate

A classification distinction identifying real estate as an asset that is not a security.

Buttonwood Agreement (1792)

An agreement that set the stage for a structured securities exchange market and helped build trust in the American financial system.

Depreciation Rate Formula

The formula $\delta = \frac{I}{K} - g_K$; with an investment-to-capital ratio of $0.08$ and physical capital growth of $3\%$ ($0.03$), the depreciation rate is $5\%$ ($0.05$).

Bretton Woods Institutions

The two multilateral institutions established under the 1944 Bretton Woods Agreement: the International Monetary Fund (IMF) and the World Bank.

Commercial Banks' Historical Asset Share

The relative share of all financial assets held by commercial banks, which has waxed and waned in importance throughout American history.

Income and Life Expectancy Relationship

The empirical relationship wherein higher personal or national income is associated with longer life expectancy.

Determinants of Labor-Productivity Growth (1800–2011)

Natural and physical capital, which was the largest determinant as U.S. labor productivity grew $1.44\%$ annually while total factor productivity grew $0.85\%$ annually.

Standard of Living vs. Quality of Life

The conceptual distinction where standard of living includes material goods and wealth, while quality of life includes overall well-being and intangible aspects.

Human Capital Contribution (1800–2011)

A factor contributing less than $10\%$ to U.S. labor-productivity growth because educational attainment and skill gains were limited until the 20th century.

Proximate Sources of Economic Growth

In the growth-accounting model, total factor productivity/labor-productivity growth and growth in the factors of production.

Expenditure Approach to GDP Components

The sum of personal consumption, private domestic investment, government consumption and investment, and net exports.

U.S. Life Expectancy Pattern Since 1800

The historical demographic pattern showing that life expectancy at birth in the United States today has roughly doubled compared with 1800.

Real GDP Per Capita Growth Rate (1965–2023)

The average annual growth rate of $1.85\%$ over 58 years as real GDP per capita expanded from $\$23{,}044$ in 1965 to $\$66{,}755$ in 2023.

Five-Year Real GDP Percentage Growth

The total percentage expansion of $20\%$ when real GDP increases from $\$10\text{ trillion}$ to $\$12\text{ trillion}$ over five years.

Expenditure-Approach Formula for GDP

The national income accounting identity expressed as $Y = C + I + G + (X - M)$.

Market Growth Hypothesis

A hypothesis that does not qualify as a fundamental source of economic growth.

Rule of 70

A calculation rule indicating that an economy with an output growing at $2\%$ annually will take 35 years to double ($70 \div 2 = 35$).

Real GDP Per Capita Calculation

The economic calculation of gross domestic product divided by total population, adjusted for inflation.

Thomas Malthus's Population Concern (1798)

The concern that population growth would outpace food production growth, inevitably leading to famine and hardship.

Intensive Source of Economic Growth

Growth driven by capital deepening per worker, specifically measured as the growth of physical capital per hour of work.

Market Design Scope

The institutional framework and operational rules of a market, which does not require a large number of buyers and sellers.

Mercantilism

The prevailing economic doctrine and practice in the American colonies under British imperial rule.

Patent Length Effect

The economic consequence of increasing patent length, which encourages the creation of new ideas but restricts the use of existing ideas.

Major U.S. Institutional Developments

Pivotal early governmental achievements centered on creating a stable financial system and establishing a central bank.

Causes of the American Revolution

A sequence of colonial taxation and regulatory laws including the Currency Act, Sugar Act, Stamp Act, and Tea Act.

Growth-Conducive Institutions

Societal and legal rules characterized by open access, inclusive structures, lack of bias, and impartiality.

Marbury v. Madison (1803)

The Supreme Court case that established the principle of judicial review in American jurisprudence.

At-Will Employment Exceptions

Legal protections limiting termination; workers who are 'free agents' do not qualify as an exception to pure at-will employment.

Indentured Servitude

A labor institution in early America wherein an individual entered into service by signing a legally binding contract.

Settler Colony Institutional Divergence

The historical development where large colonies with high European settlement built inclusive institutions, whereas small colonies with limited settlement developed extractive institutions.

Pure Food and Drug Act of 1906

Federal legislation that initiated the modern regulatory functions of the Food and Drug Administration (FDA).

Roman Civil-Law Legacy

The institutional background of U.S. states initially settled by France, Spain, or Mexico, which today have less stable state constitutions compared with common-law states.

Parker v. Foote (1838)

A New York judicial ruling that abolished the English ancient lights doctrine to accommodate urban growth and development.

Sherman Act (1890)

Pioneering federal antitrust legislation aimed at combating big business monopolies possessing market power.

Sonny Bono Copyright Term Extension Act

Intellectual property legislation that established the individual copyright term as the author's life plus 70 years.

Pure Market Economy Fallacy

The false claim that the United States operates as a pure market economy, when it is structured as a mixed economy.

U.S. Mixed Economy

An economy where most goods and services are allocated via markets, while the government provides a legal framework, regulation, public goods, and social programs.

Economic History vs. General Economics Methodology

The methodological relationship where economic historians differ from general economists in many areas, yet both share an emphasis on market exchange.

Factor Market

A market where productive inputs are bought and sold, exemplified by the labor market for high-school teachers.

Cliometrics

The research field that applies economic theory and quantitative econometric methods to historical questions.

Capital Asset Pricing Model (CAPM) in History

A quantitative asset pricing model applied within cliometrics to evaluate the financial profitability of antebellum slavery.

Capture Theory

A theory of regulation stating that government regulatory policies operate to maximize the welfare of the regulated firms.

Institutional Change in Economic History

A core subject of economic study particularly suited to the long time horizons examined in economic history courses.

Path Dependence

A historical concept illustrated by several premier modern U.S. universities having originally been founded as early colonial colleges.

Counterfactual Analysis

An analytical method employed by economic historians to understand how historical events could have unfolded differently under alternative scenarios.

Perfect Competition

The theoretical market structure actively promoted and idealized in a free-market economy.

Scarcity Pricing vs. Market Failure

A market condition where a high price resulting from a scarce factor of production is least likely to be considered a market failure.

Oligopoly

A market structure characterized by the presence of only a few sellers.

Opportunity Cost and Fertility

The demographic dynamic wherein an increase in the opportunity cost of having children has led many women to have fewer children.

U.S. Income Inequality Trend Since the 1970s

The pattern of economic distribution showing that the differences between rich and poor in the United States have increased substantially since the 1970s.