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Austrian School of economics test
feel free to point out any mistake
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Last updated: January 5, 2024
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| First submitted | May 6, 2021 |
| Times taken | 145 |
| Average score | 56.3% | Report this quiz | Report |
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1. The first Austrian economists based their contribution mainly from
Menger, Böhm-Bawerk and mises were influenced by the ideas of Tomás de Aquino and Juan de Mariana, in terms of logic analysis, individualism and human freedom
The Spanish scholastics
Greeks philosophers Democrit and Aristotle
The founding fathers, mainly thomas Jefferson
The classical liberals
2. The Austrian school relies on two principles:
The Austrian school is human-action related, that is we cannot know what humans will decide and most of aspects in economics are individual decisions-related.
Social psychology and human consciousness
Indirect realism and the invisible hand
Subjetivism and methodological individualism
Free market and gold standard
3. The human action is, according to Mises,
A project may not success after the action, satisfaction may not occur.
Uneasiness being satisfied
Will put into operation
Any movement of the human body
The state of being active
4. Why terms like "aggregate demand" are way less relevant to the Austrian School's Methodology
They can't relate to the actions of individuals
They are math-related
They are used as a way to control the economy
5. A sudden high demand on a product leads to
This is the key question to evaluate a good economist according to Hayek: https://mises.org/wire/hayeks-best-test-good-economist
The fall of the interest rate
The fall of the product's price
The detrimental of employment for companies furthest away from this product
The emerge of new stages of production
6. "Thanks" to a bank loan in our modern central bank system, a company invested in nuclear fusion, it is expected to take 20 years to complete. What will tend to happen after few years?
For a good grasp, look at the 6 consequences of credit expansion by Professor Huerta de Soto: https://www.youtube.com/watch?v=rQd7SYFEapA&t=484s
Other energy companies will make losses
Many employees will abandon the project encouraged by better salaries in other energy companies
More others companies under development will be profitable
If the company is serious and calculated expenses well, unemployment will decrease
7. Who is not austrian author
If that guy was truly libertarian he would not have controlled the interest rate.
Israel Kirzner
Friedrich Hayek
Carl Menger
Murray Rothbard
Alan Greenspan
Huerta de Soto
8. What is the main indicator an entrepreneur use to decide to initiate a project in a free-currency society?
When wondering of investing money first you evaluate if it is better to just lend it.
The profit is at least 20% of the investment
The price of the product will not decrease over time and there is a profit considering today's prices
Cheaper investment goods, the profit is higher than the employees' salary
The profit is higher than the interest rate
Cheaper labor, the profit is higher than the employees' salary
9. According to Carl Menger, how an asset becomes money in a free society?
Relatively inflationary tend
Relatively stable real value
The asset must be useful for other sectors in case of fall
10. A recession for the Austrian school is considered as
When recession explodes bad projects are detected, this is crucial for reallocation of people into genuine profitable businesses
The lose of important sectors jobs
None of mentioned
The collapse of the market
The beginning of the healing of the market
11. The minimum wage
Diminishes poverty and improve the quality of life for the lower class
Increases poverty
Keeps the same amount of poverty but improves the quality of life for the lower class
12. The great depression was devastating because
The fed didn't print enough money to face the deflation
Lack of bank regulation
The Dust Bowl
Stock market trading on margin
Hoover and Roosevelt overregulated the market
13. How has the state become that big
Public roads became norm in the modern Age, Education introduced in Prussia, pensions and health by Bismarck in Germany, Central Banking in England. Purchasing power decreased
After decades of propaganda, the government convinced the citizens of the need for supposed guarantees such as education and pensions
The incipient conditions of the Industrial Revolution required big actions
People required guarantees to be secured and get the rights they deserved
More than one is correct
Capitalism can only exist thanks to the government, both need to grow along
14. Entrepreneurship is defined as
Innate ability of human beings to discover profit opportunities in their environment
Adquired ability from which someone can discover profit opportunities in his environment
Innate ability of human beings to improve their life condition
Adquired abilty from which someone can improve his life condition
15. The value of a product is determined by
The time and costs of production + interest rate
The time and costs of production
The invisible hand
The subjective valuation of the market
16. Why a controlled interest rate at 0% is so dangerous?
Entrepreneurs decide to set up mistaken projects
All the rest
It leads to a credit expansion that at last increase unemployment of people working far from the consumption
When inflation rises and the interest rate hike again, it leads to losses and unemployment
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