The economic system based on the theories of Adam Smith is a. communism. b. democratic socialism. c. laissez-faire capitalism. d. welfare capitalism. 2. In his theory of population, Malthus proposed that a. food production increases arithmetically and population increases geometrically. b. food production increases geometrically and population increases arithmetically. c. both food production and population grow arithmetically. d. both food production and population grow geometrically. 3. Which of the following ideas was proposed by Smith in The Wealth of Nations? a. The Corn Laws should be abolished. b. The iron law of wages ensures that the interests of workers will be protected. c. The protective trade tariffs imposed by mercantilist governments help the economy. d. The specialization of workers in a mechanized production process greatly increases productivity. 4. Which of the following is an idea first proposed by Marx? a. All of human history is governed by economic laws. b. Competition reduces prices and improves quality. c. Labour is a scarce resource. d. Slaves are a valuable economic resource. 5. Which of the following ensures the “invisible hand” in a market economy? a. competitive self-interest b. government regulation c. specialization and trade d. underground or hidden activity 6. Which of the following economists made his fortune in the stock market? a. Galbraith b. Ricardo c. Smith d. Xenophon 7. Which of the following examples best illustrates Adam Smith’s division of labour? a. Henry Ford’s automobile assembly line d. keeping wages low to reduce population growth c. the organization of labour unions d. the use of interest rates to reduce consumption 8. Which of the following is not a positive check on population? a. epidemics b. famine c. sexual abstinence d. war 9. Population checks that are not positive are called a. negative. b. preventive. c. punitive. d. restrictive. 10. Which of the following economic theories makes international trade profitable for participants? a. comparative advantage b. surplus labour value c. the invisible hand d. the reserve army of the unemployed 11. Which of the following economic theories explains why workers are unable to secure higher wages? a. comparative advantage b. surplus labour value c. the invisible hand d. the reserve army of the unemployed 12. Which of the following economic theories best explains how capitalists keep a disproportionate amount of the profits generated by workers? a. comparative advantage b. the invisible hand c. surplus labour value d. the reserve army of the unemployed 13. The theory of comparative advantage was first recognized by whom? a. Adam Smith b. David Ricardo c. John Maynard Keynes d. Milton Friedman 14. Which of the following economists was not an advocate of freer trade? a. Adam Smith b. David Ricardo c. Karl Marx d. Milton Friedman 15. Which of the following is a key premise of revolutionary communism as advocated by Marx? a. Capitalism must be reformed. b. Deferred savings are the principal means of financing a revolution. c. From each according to ability, to each according to need. d. Heavy taxes must be paid by landlords and rich heirs. 16. According to Ricardo, the natural price of labour is determined by a. supply and demand. b. the iron law of wages. c. the price of food and other necessities. d. the reserve army of the unemployed. 17. Which economist is credited with saving capitalism from the Great Depression? a. Adam Smith b. John Kenneth Galbraith c. John Maynard Keynes d. Milton Friedman 18. Which economist advocated the use of deferred savings to finance the Second World War? a. Alfred Marshall b. John Kenneth Galbraith c. John Maynard Keynes d. Milton Friedman 19. During the Great Depression, unemployment rates in Canada approached _____ per cent. a. 10 b. 20 c. 25 d. 30 20. To Keynes, the Great Depression was ultimately a problem of a. too little international trade. b. too little investment and government spending. c. too much government spending on investment. d. too much money chasing after too few goods. 21. Which of the following economists was a Canadian-born professor of economics at Harvard University? a. David Ricardo b. John Kenneth Galbraith c. John Maynard Keynes d. Milton Friedman 22. Which of the following is not part of Friedman’s view of a market economy? a. guaranteed income plan to replace social welfare payouts b. increasing the minimum wage c. minimal government intervention d. using government vouchers to make public education more effective 23. According to Friedman, the money supply should be increased a. between 1 and 2 per cent per year. b. between 3 and 5 per cent per year. c. between 5 and 8 per cent per year. d. between 8 and 10 per cent per year. 24. If Malthus were alive today, he would recognize the current AIDS epidemic as a. an opportunity to exercise moral restraint. b. a positive population check. c. a preventive population check. d. medical malpractice. 25. If Marx were alive today, how would he recognize current globalization trends? a. Capitalism has reformed itself. b. Improved conditions for workers in developing countries are achieved at the expense of workers in developed countries. c. Through corporate profits, surplus value is stolen from workers in developing countries. d. Workers in developing countries need to organize labour unions. 26. Milton Friedman is a leading member of which school of economics? a. globalist b. mercantilist c. monetarist d. physiocrat 27. Monetarists believe that the best way for governments to influence the economy is to a. increase free trade. b. increase government spending. c. let market forces work freely. d. regulate the supply of money in circulation. 28. Who was the strongest advocate of welfare capitalism? a. Adam Smith b. David Ricardo c. John Kenneth Galbraith d. Milton Friedman 29. Which economist challenged the power of the aristocratic landlord class by questioning its contribution to society? a. David Ricardo b. John Kenneth Galbraith c. John Maynard Keynes d. Milton Friedman 30. Which of the following lists of economists is in correct historical order? a. Malthus, Keynes, Marx, Galbraith, Friedman b. Malthus, Keynes, Smith, Marx, Ricardo c. Smith, Keynes, Marx, Galbraith, Friedman d. Smith, Malthus, Marx, Keynes, Friedman 31. The production of a wooden lawn chair requires $30 of labour, $10 of materials, and $5 of wear and tear on the machinery used. If the chair sells for $80, what is the surplus value of labour? a. $5 b. $10 c. $35 d. $80 32. Who is often identified as the first professional economist? a. Keynes b. Malthus c. Marx d. Smith 33. The theories of which economic thinker earned economics the nickname “the dismal science”? a. Keynes b. Malthus c. Marx d. Smith 34. Which economist collaborated with Friedrich Engels? a. Keynes b. Malthus c. Marx d. Smith 35. Who is often identified as either a “demonic philosopher” or a “prophet of the proletariat”? a. Keynes b. Malthus c. Marx d. Smith 36. Which of the following lists is in correct historical order? a. division of labour, mercantilism, welfare capitalism, monetarism b. division of labour, welfare capitalism, mercantilism, monetarism c. mercantilism, division of labour, welfare capitalism, monetarism d. welfare capitalism, division of labour, monetarism, mercantilism 37. Which of the following lists is in correct historical order? a. communism, laissez-faire capitalism, monetarism, welfare capitalism b. laissez-faire capitalism, communism, welfare capitalism, monetarism c. monetarism, laissez-faire capitalism, welfare capitalism, communism d. welfare capitalism, laissez-faire capitalism, communism, monetarism 38. Which of the following economists most advocated the type of economic system presently found in Canada? a. Friedman b. Galbraith c. Marx d. Smith 39. Which of the following economists did not work as an economic adviser to government? a. Friedman b. Galbraith c. Keynes d. Malthus 40. Which of the following economists did not work as a university professor during his career? a. Friedman b. Galbraith c. Keynes d. Marx 41. Which of the following economists served as a member of parliament? a. Keynes b. Malthus c. Ricardo d. Smith 42. Which of the following economic concepts is least associated with the others? a. iron law of wages b. reserve army of the unemployed c. Smith’s law of population d. surplus value of labour 43. The iron law of wages can be linked most directly to which economic system? a. communism b. laissez-faire capitalism c. mercantilism d. monetarism 44. Which of the following pairs of economists is most ideologically compatible? a. Friedman and Marx b. Malthus and Friedman c. Marx and Smith d. Smith and Friedman 45. Which of the following is not an important component of The Communist Manifesto? a. abolition of inheritance b. abolition of private property c. clear distinction between agricultural and industrial labour d. free public education for all children 46. Which of the following pairs of economists is least ideologically compatible? a. Friedman and Galbraith b. Malthus and Ricardo c. Marx and Smith d. Smith and Friedman 47. Which economic thinker was most influenced by the conditions of the peace treaty ending the First World War? a. Friedman b. Keynes c. Galbraith d. Ricardo 48. The French school of economic thought most influential on Adam Smith was known as the a. autocrats. b. democrats. c. monocrats. d. physiocrats. 49. Which of the following economists was not an economic adviser during the Second World War? a. Friedman b. Galbraith c. Keynes d. Maxwell 50. Which of the following economists is most associated with the University of Chicago? a. Friedman b. Galbraith c. Keynes d. Malthus 51. “In the real world, large multinational corporations and executive managers hold decision-making power, not shareholders or consumers.” Who first proposed this economic idea? a. Friedman b. Galbraith c. Keynes d. Maxwell 52. According to Galbraith, in the real world of large multinational corporations, who holds decision-making power? a. consumers b. executive managers c. labour unions d. shareholders 53. According to Judith Maxwell, why do people elect governments in a global economy? a. to keep the peace b. to represent their interests in the wider world c. to share risk d. all of the above 54. Which of the following lists presents countries in the order that they would appear in the Heritage Foundation’s Index of Economic Freedom (from most free to least)? a. Canada, Hong Kong, Sweden, China b. China, Hong Kong, Canada, Sweden c. Hong Kong, Canada, Sweden, China d. Sweden, China, Canada, Hong Kong
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