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This quiz consists of 5 multiple choice and 5 short answer questions through For Chapters 11-Epilogue.

Multiple Choice Questions

1. In what political structure does the government set the price and decide what's on the shelves?
(a) Utopianism.
(b) Capitalism.
(c) Communism.
(d) Marxism.

2. In economics, what is a sustained, long-term downturn in economic activity in one or more economies?
(a) Trade-off.
(b) Recession.
(c) Depression.
(d) Business cycle.

3. In lending agreements, what is a borrower's pledge of specific property to a lender, to secure repayment of a loan?
(a) Collateral.
(b) Hedge.
(c) Interest.
(d) Subsidy.

4. According to the author, financial markets boil down to four basic simple needs. What is the second discussed in Chapter 7?
(a) Raising capital.
(b) Insuring against risk.
(c) Storing, protecting and making profitable use of excess capital.
(d) Speculation.

5. Economists call the cycle of recession and recovery what, according to the author in Chapter 9?
(a) Gresham's law.
(b) Trade-off.
(c) The business cycle.
(d) Perverse incentives.

Short Answer Questions

1. In finance, what is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price?

2. According to the author, financial markets boil down to four basic simple needs. What is the first discussed in Chapter 7?

3. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?

4. According to the author in Chapter 3, it's up to whom to consider the broad social consequences of decisions In a market economy?

5. When was the Hope credit established?

(see the answer key)

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