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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. The national security argument for protection states that:
(a) protection is not in the best national interest
(b) industries vital to national defense should be given protection
(c) protection promotes national welfare
(d) all industries should be protected

2. A tariff implemented to raise employment in the domestic nation:
(a) benefits all workers
(b) benefits all consumers
(c) has no effect on employment
(d) lowers employment in the foreign nation

3. International trade theory is based on:
(a) the principle of comparative advantage
(b) geography
(c) inflows and outflows
(d) the principle of absolute advantage

4. Prices function to transmit information to all but:
(a) sellers
(b) no one in particular
(c) buyers
(d) manufacturerr

5. A deposit represents:
(a) money stuffed in a mattress
(b) a liability of the individual
(c) a loan to the individual
(d) a claim against the bank

Short Answer Questions

1. The distribution of income is determined by all but the following:

2. Which of the following is not one of Adam Smith's duties of government?

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

4. What is a good source of information on prices and markets?

5. The Federal Deposit Insurance Corporation:

(see the answer key)

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