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

Multiple Choice Questions

1. As a result of inflation, there is:
(a) an increase in prices
(b) no change in prices
(c) more goods and services to buy
(d) decrease in prices

2. Gresham's Law says that:
(a) good money drives out bad
(b) bad money drives out good
(c) good money multiplies
(d) good money decreases

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

4. What does Friedman believe would be an effective way of reversing the trend toward bigger government?
(a) new legislation
(b) limiting budgets
(c) eliminating special interest groups
(d) adoption of an economic Bill of Rights

5. The Environmental Protection Agency was formed in:
(a) 1972
(b) 1970
(c) 1975
(d) 1966

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

7. In the inner city schools, much of the money goes for all but the following:
(a) repairing damages from vandalism
(b) maintaining discipline
(c) preventing vandalism
(d) education

8. New drugs cannot be marketed:
(a) the drug company can produce them cheaply
(b) their profitability is proven
(c) until the drug manufacturer approves them
(d) unless the FDA determines they are safe and effective

9. Private education prevailed until the:
(a) 1940s
(b) 1930s
(c) 1950s
(d) 1920s

10. The first schools were:
(a) public with voluntary attendance
(b) private with voluntary attendance
(c) `public with mandatory attendance
(d) private with mandatory attendance

11. Friedman believes that the income tax system is:
(a) needs more loopholes
(b) based on ability to pay
(c) equitable
(d) in need of reform

12. Parents who send their children to private schools:
(a) pay not taxes for public schools
(b) pay a lower amount of taxes for public schools
(c) none of the above
(d) still pay taxes for public schools

13. The growth of bureaucracy leads to:
(a) lower costs
(b) a conflict between desired objectives
(c) greater efficiency
(d) faster resolution of problems

14. Government policies are affected by:
(a) the desire of the press
(b) personal desires
(c) money
(d) the intellectual climate

15. The trucking industry was brought under ICC jurisdiction in:
(a) 1948
(b) 1935
(c) 1943
(d) 1952

Short Answer Questions

1. What items have not functioned as money over time:

2. Steps to limit the growth of government and spending have included all but:

3. In the mid-nineteenth century, the intellectual beliefs favored:

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

5. Which kind of worker has no protection?

(see the answer keys)

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