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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 2, The Tyranny of Controls.

Multiple Choice Questions

1. Interested sophistry refers to:
(a) the knowledge of consumers
(b) a new marketing tool
(c) a new production technique
(d) buy cheap and selling high

2. An exchange rate is the:
(a) interest rate in the foreign country
(b) the way trade barriers are established
(c) price of one currency in terms of another currency
(d) bill of lading

3. The infant industry argument for protection says a:
(a) new industry should be given protection until it matures and can compete on its own
(b) all new industries should be given protection
(c) only certain industries should receive protection
(d) no industries should receive protection

4. Free markets lead to:
(a) less individual freedom
(b) bankruptcy
(c) economic tyrrany
(d) greater individual freedom

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

Short Answer Questions

1. The command elements of every economy include things like:

2. The national security argument for protection states that:

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

4. The economy functions on the basis of:

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

(see the answer key)

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