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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. 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) Income inequality.
(b) National savings.
(c) Unemployment.
(d) Current account surplus/deficit.

2. What is generally the principled guide to action taken by the administrative or executive branches of the state with regard to a class of issues in a manner consistent with law and institutional customs?
(a) Pork barrel.
(b) Deductive reasoning.
(c) Perverse incentives.
(d) Public policy.

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

4. 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?
(a) Unemployment.
(b) Underemployment.
(c) Overemployment.
(d) Retirement.

5. What refers to a currency which is expected to fluctuate erratically or depreciate against other currencies?
(a) Hard currency.
(b) Soft currency.
(c) Light currency.
(d) Dark currency.

Short Answer Questions

1. 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?

2. What is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically?

3. In 1900, a pair of stockings would cost how much money according to the author in Chapter 9?

4. 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 fifth?

5. What does IMF stand for?

Short Essay Questions

1. How is the Federal Reserve described in Chapter 10? What is the role of the Fed?

2. How does the author describe the recessions of the U.S. and the Japanese in Chapter 9?

3. How does the author describe public policy in Chapter 8? What problems do politicians face in this area?

4. How does the author describe the relationship between the GDP and quality of life in India in Chapter 9?

5. What is the ERM? What is its role according to the author in Chapter 11?

6. How does the author describe the importance of monetary policy in concluding the book in Chapter 13?

7. What is the cycle of recession and recovery called? How is GDP defined in Chapter 9?

8. What can be seen about the American economy by looking at the GDP, as illustrated in Chapter 9?

9. What does the author assert nations need beyond natural resources in order to succeed in Chapter 13?

10. How is the gold standard described in Chapter 11? What is the problem with the gold standard?

(see the answer keys)

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