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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 command elements of every economy include things like:
(a) forbidding the purchase and sales of heroin
(b) court orders
(c) prices
(d) military conscription

2. Economic freedom refers to all but which of the following:
(a) ability to decide what goods to purchase
(b) ability to choose how much to spend
(c) ability to select what investments to make
(d) forced savings

3. Open Market Operations refers to:
(a) the purchase and sale of government bonds
(b) flooding the market with junk bonds
(c) stock market operations
(d) a department store sale

4. 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) visible hand
(b) command
(c) invisible hand
(d) voluntary nature

5. The infant industry argument for protection says a:
(a) new industry should be given protection until it matures and can compete on its own
(b) no industries should receive protection
(c) all new industries should be given protection
(d) only certain industries should receive protection

Short Answer Questions

1. The Great Depression began in:

2. Free trade takes place when:

3. Government subsidies to industry are viewed as:

4. What kind of international trade is best?

5. The distribution of income is determined by all but the following:

(see the answer key)

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