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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 production technique
(c) a new marketing tool
(d) buy cheap and selling high

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

3. Free international trade results in better relations between individuals who differ in all but:
(a) nationalities
(b) beliefs
(c) attitudes
(d) interests

4. The economy functions on the basis of:
(a) command
(b) orders
(c) government direction
(d) voluntary cooperation

5. Prices function to transmit information to all but:
(a) buyers
(b) manufacturerr
(c) sellers
(d) no one in particular

Short Answer Questions

1. The only kind of capital:

2. Government subsidies to industry are viewed as:

3. Adam Smith says that voluntary exchange will not take place unless:

4. Adam Smith wrote:

5. Which of the following is not one of Adam Smith's duties of government?

(see the answer key)

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