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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. According to the author in Chapter 13, when it comes to gaining economic power, it's best to avoid what, which depletes resources and limits education?
(a) War.
(b) Extention.
(c) Inflation.
(d) Deflation.

2. What refers to economy-wide fluctuations in production or economic activity over several months or years?
(a) Recession.
(b) Trade-off.
(c) Business cycle.
(d) Depression.

3. When did the California Gold Rush begin?
(a) 1862.
(b) 1912.
(c) 1849.
(d) 1969.

4. In 1900, a pair of stockings would cost how much money according to the author in Chapter 9?
(a) $0.25.
(b) $0.75.
(c) $0.60.
(d) $0.50.

5. The GDP does not consider economic activity that is what, according to the author in Chapter 9?
(a) Deductible.
(b) Subsidized.
(c) Unpaid.
(d) Interdependent.

6. The Chinese GDP has grown substantially over the past decade, yet its success is correlated to what, according to the author in Chapter 9?
(a) Utility costs.
(b) Interest payments.
(c) Quality of life.
(d) Environmental degradation.

7. Incomes rose between 1970 and 1999, yet those who described themselves as as "very happy" decreased from 36% to what?
(a) 29%.
(b) 14%.
(c) 44%.
(d) 62%.

8. What is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation?
(a) Investment.
(b) Property.
(c) Collateral.
(d) Derivative.

9. In order to get a true understanding of an economy, there are nine factors one should consider along with the GDP according to the author in Chapter 9. What is the fifth?
(a) Demographics.
(b) Income inequality.
(c) Budget deficit/surplus.
(d) Poverty.

10. In economics, what is a rise in the general level of prices of goods and services in an economy over a period of time?
(a) Inflation.
(b) Productivity.
(c) Recession.
(d) Interest.

11. What does FX stand for?
(a) Fiscal Axiom.
(b) Futures Axiom.
(c) Finacial Extreme.
(d) Foreign Exchange Market.

12. What does ERM stand for?
(a) Education Resource Mechanism.
(b) Environmental Rarity Market.
(c) Electronic Remanufacturing Market.
(d) European Exchange Rate Mechanism.

13. Nonperforming loans and bad investments caused the banks to suffer in Iceland, and by the fall of 2008, how many major banks in the country were defunct according to the author in Chapter 11?
(a) 12.
(b) 5.
(c) 3.
(d) 8.

14. The United Nations Monetary and Financial Conference was a gathering of how many delegates?
(a) 975.
(b) 560.
(c) 435.
(d) 730.

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

Short Answer Questions

1. What refers to law which has been enacted by a legislature or other governing body, or the process of making it?

2. The U.S. adopted a silver standard based on the Spanish milled dollar in what year?

3. When was the first edition of "Naked Economics: Undressing the Dismal Science" published?

4. What is a Latin prepositional phrase meaning "by heads"?

5. What is the process of contracting a business function to someone else?

(see the answer keys)

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