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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 is not one of the real forces that determine the wealth of a nation?
(a) geographic area
(b) resources
(c) mode of political and economic organization
(d) productivity

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

3. A market failure occurs when:
(a) a producer goes bankrupt
(b) an action or transaction affects third parties
(c) a producer finds there is no demand for his good
(d) the production of a good is discontinued

4. The first schools were:
(a) `public with mandatory attendance
(b) private with mandatory attendance
(c) public with voluntary attendance
(d) private with voluntary attendance

5. According to Friedman what was not a reason for accelerated U.S. monetary growth over a fifteen-year period?
(a) the full employment policy of the government
(b) workers demanding raises
(c) the Federal Reserve following the wrong policy
(d) rapid growth in government spending

Short Answer Questions

1. Children from wealthy backgrounds have better chances in education and employment. This it not representative of:

2. A change in prices affects all but the following:

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

4. The Department of Energy was formed in response to the:

5. The national security argument for protection states that:

(see the answer key)

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