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

Multiple Choice Questions

1. What does the interest rate on borrowed money need to be to prevent usury?
(a) The rate needs to be half the lowest market price.
(b) The rate needs to be somewhat above the lowest market price.
(c) The rate needs to be somewhat below the lowest market price.
(d) The rate needs to be equal to the lowest market price.

2. What is a borrower who uses his borrowed stock for immediate consumption?
(a) A prodigal.
(b) A laborer.
(c) A merchant.
(d) An investor.

3. Where do a farmer's or manufacturer's profits come from?
(a) From their stock.
(b) From what they produce.
(c) From their reserve.
(d) From their surplus.

4. What is the old subsidy rule?
(a) Any particular employment cannot draw a greater share of capital to hinder they duty from other employments.
(b) Merchants were allowed to draw back half their duty on exported goods.
(c) By act of parliment, duties are imposed only on foreign goods.
(d) Drawbacks must preserve the natural division and distribution of labor in society.

5. What does the lender consider stock lent at an interest?
(a) A profit.
(b) A capital.
(c) An industry.
(d) A revenue.

6. What has increased in countries where interest on borrowed money has been prohibited by law?
(a) Money is borrowed from other countries.
(b) Usury has increased.
(c) Capital is stagnant.
(d) Industry does not grow.

7. Before the American Revolution, what monopoly did Britain hold in Maryland and Virginia?
(a) Textiles.
(b) Tobacco.
(c) Molasses.
(d) Wheat.

8. What does a North American colonial artificer do when he has acquired a little more stock than is necessary for carrying on his own business in supplying the neighboring country?
(a) He buys land for improvement.
(b) He seeks to sell in distance towns.
(c) He invests his stock in more workmen.
(d) He reinvests his stock into his business.

9. Where do a merchant's or retailer's profits come from?
(a) From what they buy.
(b) From what they both buy and sell.
(c) From what they sell.
(d) From what they save.

10. What to British manufacturers import from the coasts of the Baltic?
(a) Cotton and linen.
(b) Molasses and sugar cane.
(c) Flax and hemp.
(d) Sugar and rum.

11. Which society sends the least number of men to war in proportion to the whole population?
(a) Hunter society.
(b) Shepherd society.
(c) Civilized society.
(d) Agricultural society.

12. What gave Great Britain the monopoly of supplying the colonies with all the commodities of growth and manufacturing?
(a) The Act for the Encouragement of Trade.
(b) The North American Trade Agreement.
(c) The Colonial Commerce Bill.
(d) The Trade Agreement of 1780.

13. What does the part of the annual production of the land and labor of any country which replaces a capital do?
(a) It pays the wages of productive labour.
(b) It restores the depleted stock.
(c) It pays the wages of unproductive labour.
(d) It replaces the needed materials of manufacturing.

14. How are almost all loans made?
(a) In silver.
(b) In goods.
(c) In paper money.
(d) In gold.

15. What did the council of Castile determine?
(a) To take possession of countries where the inhabitants desire a new government.
(b) To take possession of countries where there is the possibility of finding gold.
(c) To take possession of countries where the inhabitants are incapable of defending themselves.
(d) To take possession of countries where the inhabitants need to be converted to Christianity.

Short Answer Questions

1. What is an example of a mercantile project?

2. What is the principal cause of the rapid progress of the American colonies?

3. What determines the ordinary market price of land?

4. What does the proportion between capital and revenue regulate?

5. How does annual consumption compare to annual spending?

(see the answer keys)

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