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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. Trade restrictions create:
(a) friction between nations
(b) a more competitive environment
(c) a good political situation
(d) increase levels of trade

2. The United States banking system is:
(a) a fractional reserve system
(b) a full reserve system
(c) a no reserve system
(d) not dependent on reserves

3. What is a good source of information on prices and markets?
(a) word of mouth
(b) The Wall Street Journal
(c) a weekly magazine
(d) the Sunday paper

4. An economic contraction means all but the following:
(a) increased output
(b) decreased output
(c) unemployment
(d) lower levels of income

5. An exchange rate is the:
(a) interest rate in the foreign country
(b) price of one currency in terms of another currency
(c) the way trade barriers are established
(d) bill of lading

Short Answer Questions

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

2. Which New Deal programs were declared unconstitutional?

3. The purpose of urban renewal projects is to:

4. After World War II there was a lot of interest in:

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

(see the answer key)

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