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

Multiple Choice Questions

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

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

3. To function as a medium of exchange, an item must be:
(a) easy to carry
(b) printed
(c) valuable
(d) accepted in exchange for goods and services

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

5. What program would allow greater choices for parents?
(a) sending children to private schools
(b) being able to select any school
(c) making all education private
(d) the school voucher program

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

7. During a hyperinflation:
(a) wages increase faster than prices
(b) prices may double during a day
(c) prices fail quickly
(d) none of the above

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

9. In the tobacco economy, inflation occurred when there was:
(a) too little tobacco
(b) they switched to wampum
(c) too much tobacco
(d) no tobacco

10. Inflation results when:
(a) the money supply increases more rapidly than the level of output
(b) the money supply and the output level increase at the same rate
(c) the money supply increases less rapidly than the level of output
(d) there is no relation between output level and money supply

11. Modern labor unions trace their roots back:
(a) Great Britain
(b) the Egyptians
(c) ancient Rome
(d) to medical men in ancient Greece

12. The school voucher program would give the parents:
(a) a tax bill
(b) a voucher to be used at any school
(c) cash
(d) a tax break

13. What is not one of the real forces that determine the wealth of a nation?
(a) productivity
(b) geographic area
(c) mode of political and economic organization
(d) resources

14. The minimum wage causes:
(a) higher employment levels
(b) no effect on employment levels
(c) unemployment
(d) social unrest

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

Short Answer Questions

1. Which of the following is not a method of unions securing higher wages?

2. At the time the book was written, how many workers belonged to unions?

3. What did Pat Brennan and her husband do in Rochester, New York?

4. In Virginia in the 1600s, what functioned as money?

5. What does Friedman believe would be an effective way of reversing the trend toward bigger government?

(see the answer keys)

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