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

2. The economist that changed the way of economic thinking regarding depressions was:
(a) David Ricardo
(b) Milton Friedman
(c) John Maynard Keynes
(d) Adam Smith

3. The Great Depression began in:
(a) 1929
(b) 1940
(c) 1931
(d) 1934

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

5. Interested sophistry refers to:
(a) a new marketing tool
(b) buy cheap and selling high
(c) the knowledge of consumers
(d) a new production technique

Short Answer Questions

1. What kind of international trade is best?

2. What is a good source of information on prices and markets?

3. Which of the following is not a function of the price system:

4. What interferes with the transmittal of information by prices?

5. A market failure occurs when:

(see the answer key)

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