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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3, The Anatomy of Crisis.

Multiple Choice Questions

1. The first head of the Federal Reserve System was:
(a) Alan Greenspan
(b) Benjamin Strong
(c) J.P. organ
(d) Alexander Hamilton

2. The national security argument for protection states that:
(a) protection promotes national welfare
(b) industries vital to national defense should be given protection
(c) protection is not in the best national interest
(d) all industries should be protected

3. Which of the following is not a function of the price system:
(a) efficient use of resources
(b) distribution of income
(c) government established prices
(d) transmitting information

4. Which bank failure precipitated the banking crisis of 1930?
(a) Chase
(b) Knickerbocker Trust
(c) The Bank of the United States
(d) Bank of England

5. A deposit represents:
(a) a loan to the individual
(b) a liability of the individual
(c) a claim against the bank
(d) money stuffed in a mattress

Short Answer Questions

1. What kind of international trade is best?

2. An exchange rate is the:

3. A run on a bank occurs when depositors:

4. An economic contraction means all but the following:

5. The higher price of pencils results in all but the following:

(see the answer key)

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