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

Multiple Choice Questions

1. When did the Cuban Revolution end?
(a) 1979.
(b) 1959.
(c) 1996.
(d) 1984.

2. What does the author refer to as a situation where individuals work in their own best interest, leading to an improved standard of living for society in general?
(a) Asset allocation.
(b) Communism.
(c) Money market.
(d) Capitalism.

3. According to the author in Chapter 1, companies want to profit, and consumers want what?
(a) Results.
(b) Satisfaction.
(c) Safety.
(d) Education.

4. In what political structure does the government set the price and decide what's on the shelves?
(a) Utopianism.
(b) Capitalism.
(c) Communism.
(d) Marxism.

5. According to the author, the Hope Scholarships were a plan wherein students could borrow money for college and pay back their loans after they graduated using what?
(a) A percentage of their annual income.
(b) Interest free payments.
(c) Government bonds.
(d) Regular debit payments.

6. Michael Jensen refers to company stock options as what in Chapter 2?
(a) "Managerial heroin."
(b) "Cocaine for businessmen."
(c) "Wall Streets marijuana."
(d) "A trough of money."

7. What is a financial term denoting a collection of investments held by an investment company, hedge fund, financial institution or individual?
(a) Legislation.
(b) Collateral.
(c) Security.
(d) Portfolio.

8. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?
(a) Predictability.
(b) Recession.
(c) Index.
(d) Security.

9. In finance, what is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price?
(a) Trade-off.
(b) Option.
(c) Portfolio.
(d) Bond.

10. North Korea is a single-party state under a united front led by what party?
(a) The Korean Entitlement Party.
(b) The Korean Workers' Party.
(c) The Communist Party.
(d) The Democratic Party.

11. When was the Hope credit established?
(a) 1992.
(b) 1999.
(c) 1985.
(d) 1974.

12. In finance, what is a debt security in which the authorized issuer owes the holders a debt and, depending on the terms, is obliged to pay interest to use and/or to repay the principal at a later date?
(a) Bond.
(b) Deductible.
(c) Stock.
(d) Option.

13. Human capital is extremely important in economics because it is also tied together with what?
(a) Security.
(b) Inflation.
(c) Collateral.
(d) Productivity.

14. In Chapter 6, the author discusses poverty and income equality, using the example of what billionaire?
(a) Bill Gates.
(b) Donald Trump.
(c) Fidel Castro.
(d) Ted Turner.

15. Gary Becker was awarded the Nobel Memorial Prize in Economic Sciences in what year?
(a) 1992.
(b) 2003.
(c) 1997.
(d) 1988.

Short Answer Questions

1. What refers to a market where prices are determined by supply and demand?

2. In finance, what is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future delivery date?

3. Cuba remained a territory of Spain until the Spanish-American War ended in what year?

4. According to the author in Chapter 2, a horn from a black rhinoceros can fetch what amount on the black market?

5. In what year did the French government try to address its unemployment rates with what the author calls the economic equivalent of fool's gold?

(see the answer keys)

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