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

Multiple Choice Questions

1. The Federal Reserve System was created when the government thought that what was happening?
(a) A recession.
(b) A shortage of interest reserves.
(c) A shortage of bank reserves.
(d) A depression.

2. What chapter does Nathaniel Branden write?
(a) "Antitrust."
(b) "Common Fallacies About Capitalism."
(c) "Monopolies and Trade."
(d) "Common Truths About Capitalism."

3. What does the author believe brought the world out of feudalism?
(a) The Industrial Revolution.
(b) Statism.
(c) Free trade.
(d) Limited trade.

4. What is the name of the theory that states that good is embodied in various actions regardless of benefits and consequences?
(a) The adherence theory.
(b) The subjectivist theory.
(c) The implication theory.
(d) The intrinsic theory.

5. What does the author believe is the basic tool of the bureaucrat?
(a) Fear.
(b) Disrespect.
(c) Loathing.
(d) Immorality.

6. What do the courts protect?
(a) Criminals.
(b) Businesses.
(c) Property.
(d) Labor unions.

7. How are the railroads subsidized?
(a) Land grants.
(b) Payments.
(c) Tax deductions.
(d) Research-and-development deductions.

8. What does statism survive on, according to the author?
(a) War.
(b) Trade.
(c) Expansion.
(d) Peace.

9. The author believes that, in statism, businessmen are what?
(a) The elite.
(b) The scapegoats.
(c) The politicians.
(d) The taxpayers.

10. What is the abbreviation for the Aluminum Company of America?
(a) ALCOA.
(b) ACOA.
(c) ALCOOA.
(d) ALCA.

11. In a free market, economic power is determined by what?
(a) Inflation.
(b) Supply and demand.
(c) Surplus.
(d) Price and wages.

12. According to the author, what is the cause of the Great Depression?
(a) Communism.
(b) Capitalism.
(c) Government intervention.
(d) Isolationist policies.

13. The bloodiest conflicts in history have been _______ _______.
(a) Civil wars.
(b) Area wars.
(c) World wars.
(d) Local wars.

14. According to the author, in statism, who owns the members of the tribe?
(a) The elders.
(b) The tribe.
(c) The masses.
(d) The elite.

15. To function as a medium of exchange, an item must be durable and what?
(a) Scarce.
(b) Sturdy.
(c) Common.
(d) Plentiful.

Short Answer Questions

1. The author believes that businessmen take the blame for what?

2. What do political economists assume that man is working for?

3. How does the author think the U.S. government does with creating property rights in airwaves?

4. What is the name that the nobility, and the king, use to describe people who are considered property?

5. What, according to the author, does the gold standard facilitate?

(see the answer keys)

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