1) This group of economists advocates for extreme cuts in government spending, to prevent inflationary spending during an economic downturn.
- aThe Chicago School
- bThe Berlin School
- cThe French School
- dThe New York School
- eThe Austrian School
2) Which phenomenon best explains the shift away from command economics and toward free market development across the world?
- aFall of communism
- bThird wave of democracy
- cGeorge W. Bush’s foreign policy
- dGlobal warming
3) When the national gross domestic product (GDP) decreases in size, we say that the economy is experiencing _____.
4) Why was the 2008 financial crisis also a more complex monetary crisis for Europeans in a way that was not the case in the United States?
- aThe European Union was powerless to do anything.
- bThe common euro currency did not coincide with common fiscal law.
- cThe components of the crisis were different than in the United States.
- dThe human nature of Europeans meant that they responded more slowly.
- eGovernments were less involved in their economies than in the United States.
5) Which of the following sectors has traditionally been run as a government-backed monopoly, due to high start-up costs and economies of scale?
- dWater and sewage
- eAll of the above
6) Which of the following did NOT contribute to the Import Substitution Industrialization model?
- aHigh tariffs limited imports
- bRegulations prevent some foreign products from entering domestic markets
- cConsumers demanded more international products
- dDe-colonization made it politically unattractive to import from abroad
- eComparative advantage showed the model was inefficient
7) When mortgage holders are unable to make minimum payments on their housing loan, their house can go into _____.
8) _____ allow(s) governments to use public money to influence private markets, without exercising direct ownership over a particular company or sector.
- bPublic trading
9) Keynes’s position that a government should continue to spend money during a recession, as borrowing rates are low, is referred to as _____.
- apopular solidarity
- bbudget austerity
- cdeficit spending
- dfiscal responsibility
- emonetary activism
10) This model of economic management derived its philosophy from political Marxism-Leninism.
- aBureaucratic socialism
- cImport Substitution Industrialization
- dExport-led Industrialization
- eLaissez-faire economics