View a FREE sample

This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Protection refers to:
(a) tariffs and other trade restrictions
(b) insurance and benefits for workers
(c) insurance on shipments
(d) safe production methods

2. Equality of outcomes is related to:
(a) fairness or fair shares
(b) right to own property
(c) rights to open a business
(d) education

3. The words equality and liberty come from the:
(a) common usage
(b) Declaration of Independence
(c) dictionary
(d) welfare legislation

4. What kind of international trade is best?
(a) partically free trade
(b) no trade
(c) free trade
(d) trade with restrictions

5. Free international trade results in better relations between individuals who differ in all but:
(a) nationalities
(b) interests
(c) attitudes
(d) beliefs

6. International trade theory is based on:
(a) the principle of comparative advantage
(b) the principle of absolute advantage
(c) inflows and outflows
(d) geography

7. Black Thursday, October 24, 1929, refers to the:
(a) end of government payments
(b) collapse of the banking system
(c) collapse of the stock market
(d) end of the gold standard

8. A deposit represents:
(a) a claim against the bank
(b) a liability of the individual
(c) a loan to the individual
(d) money stuffed in a mattress

9. Government measures to promote fair shares for all:
(a) have no affefct on liberty
(b) reduce liberty
(c) enhance liberty
(d) create harmony

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

11. Government subsidies to industry are viewed as:
(a) unfair competition
(b) a way to increase efficiency
(c) good economic policy
(d) a necessity

12. When the Fed sells bonds:
(a) the banks can make more loans
(b) the monetary reserves of the banking system decrease
(c) the economy experiences inflation
(d) depositors see a decline in their bank accounts

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

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

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

Short Answer Questions

1. Trade restrictions create:

2. The legislation for the Federal Reserve System came into being as a result of:

3. In regard to equality and liberty:

4. What is the cause of the failure of many welfare programs?

5. What did Alexis de Tocqueville say was the outstanding characteristic of America?

(see the answer keys)

This section contains 477 words (approx. 2 pages at 300 words per page) View a FREE sample