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This quiz consists of 5 multiple choice and 5 short answer questions through Book 2, Chapter 5.

Multiple Choice Questions

1. What is true of both a farm and a retail trade?
(a) Each are a mobile business.
(b) Each are suspectible to interest rates.
(c) Each must invest their fixed capital.
(d) Each are confined to a precise spot.

2. Why isn't the wool of southern Scotland manufactured there?
(a) They don't have enough laborers to manufacture it.
(b) They don't have the capital to manufacture it.
(c) It's cheaper to manufacture it elsewhere.
(d) They don't have the factory to manufacture it.

3. In the rude ages of society, what was the common instrument of commerce?
(a) Textiles.
(b) Cattle.
(c) Labor.
(d) Food stuffs.

4. Where should the capital of a manufacturer generally reside?
(a) At a location close to his raw materials.
(b) At the most productive location.
(c) At a location within his country.
(d) At the cheapest location.

5. What kind of capital is employed in the improvement of land and in the purchase of useful machines and instruments of trade?
(a) Circulating capital.
(b) Improving capital.
(c) Fixed capital.
(d) Instrumental capital.

Short Answer Questions

1. What does the author consider to be a wasteful use of gold?

2. What is it called when gold purchases goods in one foreign country in order to supply the consumption of another?

3. What does the part of the annual production of the land and labor of any country which replaces a capital do?

4. What was the common rate of interest on borrowing through the greater part of Europe before the discovery of the West Indies?

5. What is a consequence of replacing gold money with paper money?

(see the answer key)

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