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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3, The Anatomy of Crisis.

Multiple Choice Questions

1. A change in prices affects all but the following:
(a) nothing
(b) wages
(c) incentrive to act on information
(d) procedures income

2. Black Thursday, October 24, 1929, refers to the:
(a) collapse of the stock market
(b) end of government payments
(c) end of the gold standard
(d) collapse of the banking system

3. The only kind of capital:
(a) is only human capital
(b) are human and physical capital
(c) is only financial capital
(d) is only physical capital

4. The Principle of Comparative Advantage states that a nation should specialize in:
(a) can get the highest price for
(b) all goods
(c) has the most of
(d) the production of goods in which it is relatively more efficient than the other nation

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

Short Answer Questions

1. Free markets lead to:

2. A coordinated restriction of payments by banks is used:

3. Government interferes with the price system by:

4. A run on a bank occurs when depositors:

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

(see the answer key)

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