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Adam Smith Capitalism

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

Free markets and global trade have created
a.
more poverty in the past 25 years
c.
more wealth and prosperity in the past 250 years than was created in the past 2000 years
b.
less wealth and prosperity
d.
more death and poverty in the past 25 years than was created in the past 2000 years
 

 2. 

We are living longer and more prosperous than the majority of people who have ever lived
a.
true
b.
false
 

 3. 

Who said that free market and free trade would connect the continents and open the world to wealth and prosperity
a.
Karl Marx
c.
Frederick Engles
b.
Adam Smith
d.
Samuel Gompers
 

 4. 

Bigger is better because it creates more trade. What is the result of more trade?
a.
People lives get better
c.
People die younger from over-consumption
b.
People lives become unimportant
d.
More trade has little effect on humans
 

 5. 

Adam Smith was a social psychologist who wrote about morality and economics. His ideas ___
a.
have been replaced by the ideas of Karl Marx
c.
led to communism
b.
are the basis of modern  world economics
d.
are no longer of any importance to modern economics
 

 6. 

What were the names of the two books written by Adam Smith that linked morality and economics?
a.
Theory of Moral Sentiments and Wealth of Nations
c.
Theory of Moral Sentiments and Wealth of Banks and Bankers
b.
Theory of Christian Morality and Wealth of Nations
d.
Theory of being Sentimental and Wealth of Nations
 

 7. 

What two things did Smith believe would help all people to become prosperous?
a.
free markets and government control
c.
free trade and free basics for the poor
b.
free markets and the division of labor
d.
division of labor and limited trade
 

 8. 

Hong Kong is a city with no agriculture, crowded with refugees and no natural resources. What did Sir John do to enable Hong Kong to become one of the most prosperous cities in the world?
a.
government help for the economy
c.
peace, low taxes, and no government interference in the economy
b.
government control of the economy
d.
made Hong Kong Socialist
 

 9. 

What happened in China after they adopted Adam Smith’s Capitalist ideas?
a.
China became even more poor
c.
The government took control of the economy
b.
600,000,000 people were lifted out of poverty
d.
600,000,000 people starved because of the poor economy
 

 10. 

What do the Chinese believe about the theories of Adam Smith?
a.
Adam Smith ideas breed fascism and poverty
c.
Smith’s ideas are not compatible with China’s ideas of morality.
b.
Adam Smith did not care about the poor
d.
Smith’s ideas are compatible with China’s ideas of morality.
 

 11. 

The most serious defect in the China system is that China has
a.
closed market for goods and a free market for ideas
c.
open market for goods and a free market for ideas
b.
open market for goods but does not have a free market for ideas
d.
no ideas or markets
 

 12. 

What is it called when products are created all over the world but are shipped to one place and assembled into one product
a.
division of labor
c.
Socialism
b.
mercantilism
d.
individualism
 

 13. 

What is the main way that goods are transported around the world in global trade?
a.
with ships at sea
c.
with railroad trains
b.
with airplanes that fly city to city
d.
by automobile
 

 14. 

Adam Smith believed that wealth was not just the money you have in the bank but also
a.
your race
c.
your labor
b.
your family
d.
your nationality
 

 15. 

Adam Smith taught that morality and markets go together. To be a moral person you had to care for others and if you combine morality and markets you will be successful.
a.
true
c.
Smith did not care about markets
b.
false
d.
Smith did not care about morality
 

 16. 

The owner of Whole Foods Market believed that Adam Smiths ideas were just as valid today as they were in the 1700’s. Whole Foods markets gives their employees the ______ to be creative in their jobs. This makes every employee feel important and satisfied.
a.
freedom
c.
regulations from the company
b.
rules from the boss
d.
money
 

 17. 

Adam Smith believed that systems run best when they are organized
a.
top down from the bosses
c.
around strict rules
b.
bottom up from the employees
d.
understanding that the boss knows best
 

 18. 

Adam Smith did NOT believe in
a.
the work of individuals
c.
central planning
b.
workers freedom
d.
money
 

 19. 

Adam Smith and Whole Foods Markets believe that the best ideas come from
a.
the corporate offices
c.
the bosses
b.
the workers
d.
the government
 

 20. 

What did Adam Smith mean by morality?
a.
fairness and an equal playing field
c.
forced income distribution
b.
government control of the resources
d.
only cheating when it was necessary
 

 21. 

Why do the parks put up signs that say, “Do Not Feed the Animals?”
a.
Animals are never satisfied and will keep coming back for more food
c.
Animals will loose the ability to take care of themselves and may die
b.
The park rangers want to get rid of the animals
d.
They do not want the animals to like human beings
 

 22. 

Adam Smith was suspicious of partnerships between government and business
a.
true
c.
there are no such partnerships
b.
false
d.
business cannot partner with business
 

 23. 

The richest areas in the United States are in the suburbs around
a.
Philadelphia
c.
Los Angeles
b.
New York
d.
Washington, D.C
 

 24. 

Smith believed that an institution can become corrupted if it is too big and
a.
allowed employees to make too many decisions
c.
made too many decisions from a central power.
b.
too rich
d.
moral
 

 25. 

If corn is a wasteful way of making gasoline, why do the oil companies use it?
a.
it is cheap
c.
it smells good
b.
the government forces them
d.
they have no other sources for gasoline
 

 26. 

Adam Smith taught that competition
a.
gave power to the corporations
c.
gave power to individual people
b.
gave power to the government
d.
kept companies from being profitable
 

 27. 

EBay is an example of the power of
a.
government social welfare
c.
controlled markets
b.
business slavery
d.
free markets
 

 28. 

The founders of the United States, such as Thomas Jefferson, admired and believed in the ideas of Adam Smith
a.
true
b.
false
 

 29. 

The main author of the Constitution of the United States used many of the ideas of Adam Smith. Who was this famous American founder?
a.
Thomas Jefferson
c.
Abraham Lincoln
b.
James Madison
d.
Franklin Roosevelt
 

 30. 

Karl Marx used the government to make life better for the people. Adam Smith believed _____ was the best way to make life better and more fair.
a.
individual freedom
c.
common ownership
b.
more government power
d.
Socialism
 



 
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