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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 4, Cradle to Grave.

Multiple Choice Questions

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

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

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

4. The term human capital refers to the:
(a) output produced by a fasting
(b) machinery in the factory
(c) personal productive capacity of an individual
(d) kinds of inputs the worker uses

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

Short Answer Questions

1. The first thing Roosevelt did after his inauguration was to:

2. Government subsidies to industry are viewed as:

3. What interferes with the transmittal of information by prices?

4. Which of the following is not a function of the price system:

5. Adam Smith says that voluntary exchange will not take place unless:

(see the answer key)

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