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

Multiple Choice Questions

1. The purpose of urban renewal projects is to:
(a) eliminate slums
(b) finance the building of offices
(c) build housing projects
(d) provide low cost housing

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

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

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

5. Trade restrictions create:
(a) friction between nations
(b) increase levels of trade
(c) a good political situation
(d) a more competitive environment

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

7. Open Market Operations refers to:
(a) flooding the market with junk bonds
(b) a department store sale
(c) stock market operations
(d) the purchase and sale of government bonds

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

9. Which of the following is not one of Adam Smith's duties of government?
(a) protection of members of society who are not responsible, such as children
(b) correct for third party effects
(c) protect members from coercion
(d) administration of justice

10. When did the concepts of equality before God and the law begin to come closer together?
(a) after the ratification of the Constitution
(b) after the Revolutionary War
(c) after the Civil War
(d) after the signing of the Declaration of Independence

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

12. Some people support tariffs because they think that tariffs:
(a) lower prices
(b) create jobs
(c) offer protection for consumer
(d) result in increased efficiency

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

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

15. An egalitarian supports:
(a) programs resulting in greater liberty
(b) equality of outcomes
(c) total freedom for all
(d) get rich quick schemes

Short Answer Questions

1. An unfavorable balance of payments situation meant:

2. Interested sophistry refers to:

3. Fair shares programs penalize the:

4. Restrictions of payments refers to:

5. The Federal Reserve Act was legislated in:

(see the answer keys)

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