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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. Restrictions of payments refers to:
(a) banks' refusal to give currency on demand to depositors who tried to make withdrawals
(b) government's refusal to pay benefits
(c) depositors inability to write checks
(d) government's inability to pay its bills

2. Government subsidies to industry are viewed as:
(a) good economic policy
(b) a way to increase efficiency
(c) a necessity
(d) unfair competition

3. The price system functions in such a way that each individual acting in his own best interests, makes everyone better off. This concept is known as the:
(a) command
(b) visible hand
(c) invisible hand
(d) voluntary nature

4. International trade theory is based on:
(a) geography
(b) the principle of absolute advantage
(c) the principle of comparative advantage
(d) inflows and outflows

5. Black Thursday, October 24, 1929, refers to the:
(a) end of government payments
(b) collapse of the stock market
(c) end of the gold standard
(d) collapse of the banking system

Short Answer Questions

1. A tariff implemented to raise employment in the domestic nation:

2. Economic freedom refers to all but which of the following:

3. Governments intervene in foreign currency markets:

4. What kind of international trade is best?

5. The only kind of capital:

(see the answer key)

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