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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

2. The higher price of pencils results in all but the following:
(a) fewer pencils
(b) the firing of more workers to produce pencils
(c) higher wages for pencil production workers
(d) better worker condiciton for pencil prolduction workers

3. Governments intervene in foreign currency markets:
(a) by increasing exports
(b) by increasing imports
(c) by buying and selling domenstic and foreign currency
(d) by refusing to release currency to the market

4. Which of the following is not a public assistance program?
(a) food stamps
(b) Earned Income Credit
(c) Medicaid
(d) Aid to Families with Dependent Children

5. What action did the Fed take after England abandoned the gold standard?
(a) raised the discount rate
(b) began hoarding gold
(c) suspended open market operations
(d) lowered the discount rate

Short Answer Questions

1. In regard to equality and liberty:

2. The economy functions on the basis of:

3. The distribution of income is determined by all but the following:

4. An egalitarian supports:

5. Restrictions of payments refers to:

Short Essay Questions

1. What is a market failure?

2. What is meant by equality of outcome?

3. What are Open Market Operations?

4. Which of the three kinds of equality causes a conflict with liberty?

5. What is a restriction of payments?

6. What happens if there in interference with prices?

7. Which two New Deal programs were declared unconstitutional?

8. What good does Friedman use as an example of voluntary exchange?

9. What is the concept of the invisible hand?

10. Why weren't the New Deal programs carried to completion?

(see the answer keys)

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