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

Multiple Choice Questions

1. The major welfare program in the United States is:
(a) housing assistance
(b) food stamps
(c) Medicaid
(d) Old Age Survivors and Dependants Insurance program

2. Children from wealthy backgrounds have better chances in education and employment. This it not representative of:
(a) equality of opportunity
(b) equal rights
(c) equality before God
(d) equality of outcomes

3. The term human capital refers to the:
(a) personal productive capacity of an individual
(b) machinery in the factory
(c) kinds of inputs the worker uses
(d) output produced by a fasting

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

5. The first thing Roosevelt did after his inauguration was to:
(a) order people to work
(b) authorize open market operations
(c) order banks to close for a bank holiday
(d) raise taxes on profits

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

7. The equality of outcomes approach is based on:
(a) contribution to output
(b) rewarding those who work hard
(c) fair shares for everyone
(d) incentive

8. Policies based on fair shares or 'to each according to his needs' have resulted in severe lack of liberties in all but the following:
(a) United States
(b) Cambodia
(c) Russia
(d) China

9. The only kind of capital:
(a) is only human capital
(b) are human and physical capital
(c) is only physical capital
(d) is only financial capital

10. Equality before the law refers to all but:
(a) innate abilities
(b) nationality
(c) race
(d) religion

11. What did Alexis de Tocqueville say was the outstanding characteristic of America?
(a) equality
(b) liberty
(c) good opportunities
(d) good incomes

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

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

14. New Deal temporary programs included all but:
(a) WPA
(b) direct federal relief to the indigent
(c) medicine
(d) Civilian Conservations Corps

15. Prices function to transmit information to all but:
(a) sellers
(b) manufacturerr
(c) no one in particular
(d) buyers

Short Answer Questions

1. Protection refers to:

2. The Federal Reserve Act was legislated in:

3. Which bank failure precipitated the banking crisis of 1930?

4. Which New Deal programs were declared unconstitutional?

5. A deposit represents:

(see the answer keys)

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