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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 9, The Cure for Inflation.

Multiple Choice Questions

1. What functions as the central bank for the United States?
(a) the Bank of England
(b) the Bank of the United States
(c) Chase Bank
(d) the Federal Reserve System

2. Which of the following is not a function of the price system:
(a) distribution of income
(b) government established prices
(c) efficient use of resources
(d) transmitting information

3. What problems have there been with unions?
(a) not enough members
(b) misuse and misappropriation of funds
(c) salaries lag the non-union sector
(d) fraud

4. The major welfare program in the United States is:
(a) Medicaid
(b) Old Age Survivors and Dependants Insurance program
(c) housing assistance
(d) food stamps

5. Originally, in the early days of the country, equality meant:
(a) the basis for welfare legislation
(b) equality in all aspects of life
(c) equality before God
(d) the end of slavery

Short Answer Questions

1. Government subsidies to industry are viewed as:

2. Which of the following is a method of government enforcing higher wages?

3. According to Friedman, the former Soviet economy was based on:

4. An economic contraction means all but the following:

5. At the time the book was written, how many workers belonged to unions?

(see the answer key)

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