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

Multiple Choice Questions

1. Regarding public and private colleges and universities, the number of students who complete the undergraduate degrees is:
(a) only slightly higher at pubhlic institutions
(b) higher at private institutions
(c) the same at public and private institutions
(d) higher at public institutions

2. Which of the following is not a way of rationing high paying jobs:
(a) nepotism
(b) hiring anyone
(c) corruption
(d) featherbedding

3. The reason given for regulation of industry is to:
(a) protect the industry from the effects of competition
(b) protect the consumer
(c) stabilize the industry
(d) force higher prices

4. As a result of inflation:
(a) one dollar buys more goods and services
(b) consumers buy more goods and services
(c) consumers feel richer
(d) one dollar buys fewer goods and services

5. According to Friedman, the way to cure inflation is to:
(a) reduce the rate of monetary growth
(b) force consumers to increase their savings
(c) limit the amount of goods and services available for sale
(d) promote spending policies

6. To improve their position, railroads engaged in:
(a) promotions
(b) intensive advertising
(c) good service
(d) rate fixing

7. Which of the following is not a method of unions securing higher wages?
(a) collusion with the employer
(b) the free market
(c) enforcing a higher wage
(d) restricting jobs

8. All but the following are functions of the CPSC:
(a) development of standards for consumer products
(b) to help consumers evaluate products
(c) advertising
(d) conduct safety tests on products

9. What did Pat Brennan and her husband do in Rochester, New York?
(a) they challenged a postal increase
(b) they established a business that competed with the United States Post Office
(c) they supported measures to limit the growth of business
(d) they became lobbyists

10. Government spending can be financed by all but:
(a) increasing the money supply
(b) taxes
(c) borrowing
(d) decreasing the money supply

11. Special interest groups result in:
(a) a reduction in costs
(b) common support for good causes
(c) better legislation for everyone
(d) higher costs

12. All but the following have resulted from centralization in schooling:
(a) larger scale units
(b) less choice for consumers
(c) increased power for administrators
(d) more choice for consumers

13. What items have not functioned as money over time:
(a) beads
(b) dirt
(c) Cowrie shells
(d) metals

14. In what ways does competition protect the consumer?
(a) by advertising
(b) consumers will not continually buy shoddy products
(c) by the information provided with the product
(d) through the honesty of sellers

15. What problems have there been with unions?
(a) misuse and misappropriation of funds
(b) salaries lag the non-union sector
(c) not enough members
(d) fraud

Short Answer Questions

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

2. Attendance at school became mandatory in all states in:

3. Most of the funding for public education is provided by the:

4. Gresham's Law says that:

5. As a result of inflation, there is:

(see the answer keys)

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