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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 4-7.

Multiple Choice Questions

1. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?
(a) Predictability.
(b) Recession.
(c) Index.
(d) Security.

2. In finance, what is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price?
(a) Portfolio.
(b) Bond.
(c) Option.
(d) Trade-off.

3. According to the author, there are two lessons to be learned from a monopoly situation. What is the second?
(a) Government shouldn't actually do the work of maintaining infrastructure.
(b) Governments should maintain the financial infrastructure more.
(c) Government shouldn't provide any service that could be covered by the private sector.
(d) Governments should provide more services.

4. What is the capital of the Republic of Cuba?
(a) Tijuana.
(b) Kingston.
(c) Miami.
(d) Havana.

5. What is a contract between two parties that specifies conditions under which payments, or payoffs, are to be made between the parties?
(a) Futures contract.
(b) Exchange rate.
(c) Legislation.
(d) Derivative.

Short Answer Questions

1. OPEC is an intergovernmental organization of how many oil-producing countries?

2. What is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets?

3. What is a term used in economics that refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information?

4. What describes the extent to which time or effort is well used for the intended task or purpose?

5. What, according to the author, motivates talented teachers to leave to go onto other professions?

(see the answer key)

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