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

Multiple Choice Questions

1. According to the author in Chapter 11, the problem with this gold standard was the central bank could do what?
(a) Manipulate exchange rates.
(b) Devalue the currency.
(c) Charge interest.
(d) Require collateral.

2. Charles Wheelan graduated from what educational institution?
(a) Dartmouth College.
(b) Harvard University.
(c) University of Chicago.
(d) Yale University.

3. What is an economic principle that states "Bad money drives out good"?
(a) Adverse selection.
(b) The uniform pay scale.
(c) Gresham's law.
(d) The Juche Idea.

4. What does ERM stand for?
(a) Education Resource Mechanism.
(b) Electronic Remanufacturing Market.
(c) Environmental Rarity Market.
(d) European Exchange Rate Mechanism.

5. In order to get a true understanding of an economy, there are nine factors one should consider along with the GDP according to the author in Chapter 9. What is the third?
(a) National savings.
(b) Unemployment.
(c) Income inequality.
(d) Current account surplus/deficit.

6. What, in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value?
(a) Soft currency.
(b) Hard currency.
(c) Light currency.
(d) Dark currency.

7. In many countries, the negative effects of the Great Depression lasted until the start of what?
(a) Vietnam.
(b) World War II.
(c) The Korean War.
(d) World War I.

8. According to the author in Chapter 9, to ensure accuracy, the real GDP is a figure that has been adjusted to account for what?
(a) Inflation.
(b) Collateral.
(c) Interest.
(d) Deflation.

9. What is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation?
(a) Property.
(b) Investment.
(c) Derivative.
(d) Collateral.

10. From 1997 to 2002, Charles Wheelan was the Midwest correspondent for what publication?
(a) The Wall Street Journal.
(b) Investors Business Daily.
(c) The Economic Times.
(d) The Economist.

11. Where did Charles Wheelan earn a PhD in public policy?
(a) Dartmouth College.
(b) The Harris School.
(c) Yale University.
(d) Harvard University.

12. In 1900, a pair of stockings would cost how much money according to the author in Chapter 9?
(a) $0.50.
(b) $0.60.
(c) $0.75.
(d) $0.25.

13. Where does the author live and work today?
(a) Phoenix, Arizona.
(b) San Francisco, California.
(c) Minneapolis, Minnesota.
(d) Chicago, Illinois.

14. Incomes rose between 1970 and 1999, yet those who described themselves as as "very happy" decreased from 36% to what?
(a) 14%.
(b) 44%.
(c) 29%.
(d) 62%.

15. In Chapter 13, the author states that according to the United Nations Food and Agriculture Organization, over how many people in this world don't get enough to eat?
(a) 350 million.
(b) 1 billion.
(c) 800 million.
(d) 100 million.

Short Answer Questions

1. In lending agreements, what is a borrower's pledge of specific property to a lender, to secure repayment of a loan?

2. What, as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks?

3. What refers to law which has been enacted by a legislature or other governing body, or the process of making it?

4. What is the ninth factor one should consider along with the GDP to understand an economy, according to the author in Chapter 9?

5. Economists call the cycle of recession and recovery what, according to the author in Chapter 9?

(see the answer keys)

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