View a FREE sample

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

Multiple Choice Questions

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

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

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

4. Adam Smith wrote:
(a) The Price System
(b) Economic Made Simple
(c) Das Kapital
(d) The Wealth of Nations

5. An economic contraction means all but the following:
(a) lower levels of income
(b) increased output
(c) decreased output
(d) unemployment

Short Answer Questions

1. An exchange rate is the:

2. What kind of international trade is best?

3. International trade theory is based on:

4. The Federal Deposit Insurance Corporation:

5. Government interferes with the price system by:

(see the answer key)

This section contains 255 words (approx. 1 page at 300 words per page) View a FREE sample