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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. Which bank failure precipitated the banking crisis of 1930?
(a) Bank of England
(b) Chase
(c) Knickerbocker Trust
(d) The Bank of the United States

2. The first head of the Federal Reserve System was:
(a) Benjamin Strong
(b) J.P. organ
(c) Alexander Hamilton
(d) Alan Greenspan

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

4. What interferes with the transmittal of information by prices?
(a) actions of sellers
(b) actions of buyers
(c) Governmental control of prices
(d) actions of manufacturers

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

Short Answer Questions

1. A market failure occurs when:

2. Government subsidies to industry are viewed as:

3. The Great Depression began in:

4. Prices function to transmit information to all but:

5. The price system functions in such a way that each individual acting in his own best interests, makes everyone better off. This concept is known as the:

(see the answer key)

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