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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3, The Anatomy of Crisis.

Multiple Choice Questions

1. An unfavorable balance of payments situation meant:
(a) nothing
(b) equality of inflows and outflows
(c) a surplus
(d) a deficit

2. The command elements of every economy include things like:
(a) court orders
(b) military conscription
(c) forbidding the purchase and sales of heroin
(d) prices

3. The economist that changed the way of economic thinking regarding depressions was:
(a) John Maynard Keynes
(b) David Ricardo
(c) Milton Friedman
(d) Adam Smith

4. What action did the Fed take after England abandoned the gold standard?
(a) suspended open market operations
(b) raised the discount rate
(c) began hoarding gold
(d) lowered the discount rate

5. What is a good source of information on prices and markets?
(a) a weekly magazine
(b) word of mouth
(c) The Wall Street Journal
(d) the Sunday paper

Short Answer Questions

1. The legislation for the Federal Reserve System came into being as a result of:

2. Economic freedom refers to all but which of the following:

3. An exchange rate is the:

4. A deposit represents:

5. Free international trade results in better relations between individuals who differ in all but:

(see the answer key)

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