View a FREE sample

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

Multiple Choice Questions

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

2. Trade restrictions create:
(a) increase levels of trade
(b) friction between nations
(c) a good political situation
(d) a more competitive environment

3. Governments intervene in foreign currency markets:
(a) by buying and selling domenstic and foreign currency
(b) by increasing exports
(c) by increasing imports
(d) by refusing to release currency to the market

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

5. Which of the following is not one of Adam Smith's duties of government?
(a) protection of members of society who are not responsible, such as children
(b) protect members from coercion
(c) administration of justice
(d) correct for third party effects

Short Answer Questions

1. An unfavorable balance of payments situation meant:

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

3. Some people support tariffs because they think that tariffs:

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

5. The infant industry argument for protection says a:

(see the answer key)

This section contains 253 words (approx. 1 page at 300 words per page) View a FREE sample