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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 10, The Tide is Turning.

Multiple Choice Questions

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

2. The infant industry argument for protection says a:
(a) no industries should receive protection
(b) all new industries should be given protection
(c) only certain industries should receive protection
(d) new industry should be given protection until it matures and can compete on its own

3. The Federal Deposit Insurance Corporation:
(a) guarantees the repayment of bank loans
(b) provides mortgage insurance for homeowners
(c) guarantees the full amount of all deposits against loss
(d) guarantees deposits against a loss up to a stated amount

4. In Virginia in the 1600s, what functioned as money?
(a) beads
(b) gold
(c) tobacco
(d) wampum

5. What does Friedman believe would be an effective way of reversing the trend toward bigger government?
(a) limiting budgets
(b) adoption of an economic Bill of Rights
(c) new legislation
(d) eliminating special interest groups

Short Answer Questions

1. The Department of Energy was formed in response to the:

2. The national security argument for protection states that:

3. In Great Britain:

4. Government spending can be financed by all but:

5. Governments intervene in foreign currency markets:

(see the answer key)

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