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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 4, Cradle to Grave.

Multiple Choice Questions

1. According to Friedman, the former Soviet economy was based on:
(a) voluntary cooperation
(b) none of the above
(c) command
(d) free markets

2. A coordinated restriction of payments by banks is used:
(a) meet the public's demands for currency
(b) faster a monetary expansion
(c) to stop a run on banks
(d) intensify a run on banks

3. Adam Smith says that voluntary exchange will not take place unless:
(a) it is commanded
(b) the government can tax the transaction
(c) both parties benefit from it
(d) one party can profits

4. Regarding the depression, Roosevelt's adviser's believed in:
(a) no intervention in the economy
(b) aggressive intervention by government
(c) a balanced budget
(d) waiting for the economy to heal itself

5. The command elements of every economy include things like:
(a) military conscription
(b) prices
(c) court orders
(d) forbidding the purchase and sales of heroin

Short Answer Questions

1. The term human capital refers to the:

2. An economic contraction means all but the following:

3. A run on a bank occurs when depositors:

4. A market failure occurs when:

5. Interested sophistry refers to:

(see the answer key)

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