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

2. The distribution of income is determined by all but the following:
(a) reputation
(b) the productive resource supplied
(c) the quality of the resource
(d) the price that resource receives in the market

3. Adam Smith says that voluntary exchange will not take place unless:
(a) both parties benefit from it
(b) one party can profits
(c) the government can tax the transaction
(d) it is commanded

4. Open Market Operations refers to:
(a) the purchase and sale of government bonds
(b) a department store sale
(c) flooding the market with junk bonds
(d) stock market operations

5. Free trade takes place when:
(a) when one party can benefit
(b) when consumers want a good
(c) when producers want to see a good
(d) all parties feel they can benefit

Short Answer Questions

1. The economy functions on the basis of:

2. The higher price of pencils results in all but the following:

3. Restrictions of payments refers to:

4. The United States banking system is:

5. Which bank failure precipitated the banking crisis of 1930?

(see the answer key)

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