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

Multiple Choice Questions

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

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

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

4. In regard to equality and liberty:
(a) there is no relationship betwen the two
(b) there is a slight relationship between the two
(c) they are two independent concepts
(d) there is a relationship between the two

5. An economic contraction means all but the following:
(a) decreased output
(b) increased output
(c) unemployment
(d) lower levels of income

6. Fair shares programs penalize the:
(a) wealthy
(b) government
(c) poor
(d) all classes

7. Which bank failure precipitated the banking crisis of 1930?
(a) Knickerbocker Trust
(b) Chase
(c) The Bank of the United States
(d) Bank of England

8. The price system functions in such a way that each individual acting in his own best interests, makes everyone better off. This concept is known as the:
(a) voluntary nature
(b) visible hand
(c) command
(d) invisible hand

9. What is the cause of the failure of many welfare programs?
(a) lack of recipients
(b) lack of interest by the public
(c) lack of interest by the government
(d) design and implementation flaws

10. Which New Deal programs were declared unconstitutional?
(a) AAA and WPA
(b) Social Security
(c) NRA and AAA
(d) WPA and NRA

11. 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

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

13. The United States banking system is:
(a) a full reserve system
(b) a fractional reserve system
(c) not dependent on reserves
(d) a no reserve system

14. The Employment Act of 1946 dictated government's responsibility for all but the following:
(a) taxes
(b) purchasing power
(c) production
(d) employment

15. Equality is discussed in all but the following ways:
(a) before God
(b) in every way
(c) outcomes
(d) opportunity

Short Answer Questions

1. Which of the following is not a problem experienced by the British National Health Service?

2. Enforced equality is a part of life in:

3. Policies based on fair shares or 'to each according to his needs' have resulted in severe lack of liberties in all but the following:

4. Which of the following is not a public assistance program?

5. Government measures to promote fair shares for all:

(see the answer keys)

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