A. After studying this chapter the student should be able to

1-1 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

CHAPTER 1

A Brief Economic History of the United States

• After studying this chapter the student should be able to

• Summarize America’s economic development in the 19

th century.

• Describe the effect of the Great Depression on our economy and evaluate the

New Deal measures to bring about recovery.

• Discuss the impact of World War II on our economy.
• List and discuss the major recessions we had since World War II.
• Summarize the economic highlights of each decade since the 1950s.
• Differentiate the “new economy” from the “old economy.”
• Assess America’s place in history.

• Ideas for use in class

Getting started

• This first chapter sets Slavin’s Economics apart from most other textbooks. It

begins with economic history so that students see how economic institutions and economic policies have changed over time. Explain the approach to

students, emphasizing:

• Students come to the course with varying backgrounds in U.S. history.This chapter provides everyone with a common level of knowledge necessary for the remainder of the course.

• In order to understand today’s economic issues, we need to know: Why do

we have our current economic institutions? What policies have been tried in the past? What worked? What didn’t?

• Gauge how much your students already know about economic history.

Starting off with a quiz likely will frighten students—and perhaps the results will distress you, the instructor. Instead, use a creative approach to find out what students have learned in previous courses and what they still need to learn.

Ask students what questions have puzzled them about the U.S. economy.

Prompt them to use higher level critical thinking questions such as: How

did…?, and Why would…?, rather than What is…? And When did…?. If all the questions are about the current economy, prompt students to think historically by asking why the current situation arose.

(Economics 11e Stephen Slavin) (Solution Manual all Chapters) 1 / 4

Chapter 01 - A Brief Economic History of the United States 1-2 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Active learning strategies

• Students may feel overwhelmed by the names, dates, and events described in

the chapter. Construct a time line in which the links between events are highlighted. For example, the national railroad network, constructed between 1850 and 1890, enabled mass production and mass consumption; the Great Depression ended only with U.S. entry in World War II; oil price increases preceded stagflation of the 1970s; the bursting of the dot-com bubble and the new bubble in real estate (housing) prices. There are many more event-pairs described in the chapter.

Draw a large timeline on the board. Make sure students understand that the scale underneath needs to be consistent; for example, a 10-year time span always needs to be the same distance apart. Some students with weak quantitative reasoning skills will not know this.

In teams of two, students receive two pieces of paper each with one of the two connected events. Ask students to decide which event came first and its approximate time frame. Students tape the two pieces of paper on the timeline for other students to see and, if necessary, correct. Some of the U.S. presidents and their impact on the economy are described in the chapter. Have students add relevant presidential administrations to the timeline.

• Break down the chapter’s historical presentation into time periods (for

example, pre-Civil War, reconstruction, and so on). Assign one time period to a group of four students. Within that group each student has one of the

following tasks: What new terms are presented in the section (define them)?;

What was the main idea in this section?; What questions remain unanswered?; and provide a visual representation of the ideas in the section (such as a timeline or concept map).

Because this is a short chapter, work completed in small groups need not be reported to the entire class; that would be tedious and time-consuming.

• Homework questions and projects

• For updated summaries and wry commentary on research on economic history

see Brad DeLong’s course and blog http://delong.typepad.com/.

Extensive further research is possible for this chapter. For overviews see:

“Symposium: Looking Backward at Economics and the Economy,” Journal of

Economic Perspectives, 14(1) Winter 2000.

Alfred D. Chandler, Jr., Strategy and Structure: Chapters in the History of the

American Industrial Enterprise. 2 / 4

Chapter 01 - A Brief Economic History of the United States 1-3 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Robert L. Heilbroner and Aaron Singer, The Economic Transformation of America:

1600 to the Present.

• U.S. economic history can be compared with that of other nations. On the

Internet, country by country economic analyses are available at the CIA

factbook at:

www.cia.gov/library/publications/the-world-factbook/fields/2092.html.

For a provocative historical approach see David Landes, The Wealth and

Poverty of Nations: Why Some Are So Rich and Some So Poor

For a long-term anthropological approach see Jared Diamond, Guns, Germs and Steel.

• The chapter presents the U.S. economy as successful in some ways, yet facing

problems in other ways. For an introduction to the debate about the current

U.S. economy—is it half-full or half empty?—see two contrasting views:

For an optimistic view of U.S. economic equality, see Michael Cox, Myths of

Rich and Poor: Why We’re Better Off than We Think. For a view critical of

U.S. economic equality, see Lawrence Mishel, The State of Working America.

• For research on economic growth by Paul Romer, see

http://ideas.repec.org/e/pro45.html.

• Add some levity to the start of the course by using “Jokes about economists

and economics” at http://netec.wustl.edu/JokEc.html. Be forewarned: these are uncensored.

Answers to Multiple-Choice Questions

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Chapter 01 - A Brief Economic History of the United States 1-4 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

• a
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Answers to Fill-In Questions

1. 1933

• 9
• December, 2007
• the United States
• 25
• Lyndon Johnson

7. 500

• 3
• a plenitude of land in comparison with amount of labor (or, a scarcity of

labor).

• government spending on World War II (the New Deal did not do the job)

11. 12

• 1875 (give or take a couple of years)
• G.I. bill of rights
• 20th

Answers to Questions for Further Thought and Discussion

• Describe, in as much detail as possible, the impact of the Great Depression on the

lives of those who lived through it. If you know anyone who remembers the 1930s, ask them to describe those times.

Some of the things that typify those times were the breadlines, soup kitchens, hobo jungles, Hoovervilles, widespread unemployment and poverty. Also prominent were the New Deal, the collapse of the banking system, the foreclosed mortgages, and, perhaps most significant, the loss of hope by millions of Americans of ever making a decent living.

• What were the main agricultural developments over the last two centuries?

1834: Cyrus McCormick’s mechanical reaper, which quadrupled output of farm

workers by 1860.

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