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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. Government interferes with the price system by:
(a) ignoring it
(b) tariffs
(c) restraints on international trade
(d) action fixing

2. An unfavorable balance of payments situation meant:
(a) a surplus
(b) a deficit
(c) equality of inflows and outflows
(d) nothing

3. Restrictions of payments refers to:
(a) government's refusal to pay benefits
(b) depositors inability to write checks
(c) government's inability to pay its bills
(d) banks' refusal to give currency on demand to depositors who tried to make withdrawals

4. Some people support tariffs because they think that tariffs:
(a) create jobs
(b) offer protection for consumer
(c) lower prices
(d) result in increased efficiency

5. Open Market Operations refers to:
(a) a department store sale
(b) the purchase and sale of government bonds
(c) flooding the market with junk bonds
(d) stock market operations

Short Answer Questions

1. The higher price of pencils results in all but the following:

2. When the Fed sells bonds:

3. The national security argument for protection states that:

4. The only kind of capital:

5. Protection refers to:

(see the answer key)

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