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

Multiple Choice Questions

1. What describes the extent to which time or effort is well used for the intended task or purpose?
(a) Intention.
(b) Reliability.
(c) Proximity.
(d) Efficiency.

2. When was Burton G. Malkiel born?
(a) 1932.
(b) 1907.
(c) 1918.
(d) 1925.

3. 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) Option.
(d) Stock.

4. Arab members of OPEC alarmed the developed world when they used the "oil weapon" during what war by implementing oil embargoes?
(a) The Yom Kippur War.
(b) The Gaza War.
(c) The Torah War.
(d) The Jerusalem War.

5. Behavioral economics intertwine economics and what?
(a) Psychology.
(b) Geometry.
(c) Religion.
(d) Geography.

6. Who introduced the Hope credit?
(a) Ronald Reagan.
(b) George W. Bush.
(c) Bill Clinton.
(d) John F. Kennedy.

7. What is the fourth simple need of financial markets, as discussed in Chapter 7?
(a) Insuring against risk.
(b) Speculation.
(c) Raising capital.
(d) Storing, protecting and making profitable use of excess capital.

8. In economics and sociology, what refers to any factor that enables or motivates a particular course of action or counts as a reason for preferring one choice to the alternatives?
(a) Incentive.
(b) Belief.
(c) Barrier.
(d) Punishment.

9. 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?
(a) 1997.
(b) 2000.
(c) 1993.
(d) 1988.

10. When was Gary Becker born?
(a) 1956.
(b) 1922.
(c) 1930.
(d) 1945.

11. What is a contract between two parties that specifies conditions under which payments, or payoffs, are to be made between the parties?
(a) Derivative.
(b) Exchange rate.
(c) Legislation.
(d) Futures contract.

12. According to Burton G. Malkiel in the Forward, economists often don't show a connection to what?
(a) Wall Street.
(b) Everyday life.
(c) Mathematics.
(d) Statistics.

13. What is an economic model of price determination in a market that concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers?
(a) Supply and demand.
(b) Money market.
(c) Adverse selection.
(d) Floating exchange rate.

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

15. The Lehman Brothers bank problem in 2008 occurred because the banks weren't what, according to the author?
(a) Keeping enough money on hand.
(b) Analyzing risk.
(c) Paying out interest.
(d) Using their own money.

Short Answer Questions

1. What is a term used in economics that refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information?

2. According to the author, financial markets boil down to four basic simple needs. What is the first discussed in Chapter 7?

3. What rhetorical question do economists ask, according to the author in Chapter 1?

4. When did the Korean War begin?

5. Who led the Cuban Revolution?

(see the answer keys)

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