Quiz: A Treatise on Political Economy

All 50 questions. A perfect score earns the gold medal; 80% earns silver.

1. 1. What does Say give as the cause of the “prodigious circulation” in revolutionary France?

   The opening of the colonial trade to neutrals A flood of Spanish silver The steady depreciation of the assignats The abolition of internal customs barriers
2. 2. Why, in Say’s example, should a bank of circulation not lend its notes on mortgage to a landholder?

   Mortgage loans pay too little interest to cover the cost of issuing notes The law forbids banks of circulation to hold or foreclose on land A mortgage cannot be turned into specie when notes are presented Landholders are poor credit risks who seldom repay their loans on time
3. 3. What evidence does Say cite that slave plantations were highly profitable to their owners?

   Brazilian planters paid no taxes at all on either their sugar or their slaves Georgia cotton was spun more cheaply than English cotton Slaves in the West Indies were hired out to others for a dollar a day An estate in St. Domingo repaid its purchase price in six years
4. 4. With what example does Say open his chapter on immaterial products?

   A banker discounting a bill A farmer storing grain for winter A painter finishing a portrait for a patron A physician visiting a sick person
5. 5. How does Say define production?

   As the accumulation of gold and silver As the extraction of raw materials from the earth As the creation of utility, not of matter As the labour embodied in a material object
6. 6. Which change of fashion does Say say dealt a severe blow to the workers of Sheffield and Birmingham?

   The abandonment of powdered wigs The fashion for cotton over woollen cloth The replacement of swords by walking-canes The substitution of shoe ribbons for buckles
7. 7. Why, according to Say, is Poland poor despite exporting much wheat?

   She confines her industry to agriculture Her soil is too poor for cultivation Her government taxes exports too heavily Holland refuses to buy her grain at a fair price
8. 8. Which of the two faults in consumption does Say judge more harmful to society, and why?

   Avarice, because hoarded money is lost to circulation for ever Prodigality, because it destroys the capital that supports industry Prodigality, because it raises the price of luxuries Avarice, because the miser employs no servants
9. 9. What conclusion, “paradoxical” at first sight, does Say draw about markets?

   Abundant money is the chief cause of brisk sales The spending of unproductive classes sustains demand Imports destroy the market for home products Production itself opens a demand for products
10. 10. What does Say conclude from comparing a 10 per cent tax on incomes of 60,000 and 60 dollars?

    That the poor should be exempt from all indirect taxes That taxation cannot be equitable unless its ratio is progressive That a proportional tax is the only just tax That income taxes should be replaced by a land tax
11. 11. What happened to marriages in Prussia after the plague of 1710, according to Süssmilch’s tables as cited by Say?

    They stayed exactly the same They fell by a third They ceased almost entirely for several years They doubled
12. 12. On what main ground does Say reject Sismondi’s proposal that employers be obliged to maintain their labourers?

    It would make French manufactures too dear to compete in foreign markets Labourers would refuse to work for masters who controlled their private lives The existing poor laws and hospitals already provided enough relief for labourers It would violate property and liberty; low wages also benefit consumers
13. 13. What example does Say give of injudicious consumption in villages?

    Spending on a one-day festival what would build a fountain Building a large new church while the parish roads went unrepaired Holding lotteries every season to pay the village schoolmaster’s salary Buying lace for church vestments instead of seed-corn for the poor
14. 14. Which kinds of instruction does Say think should be paid for out of the public purse?

    Moral philosophy and religious doctrine Elementary schooling and the highest abstract science University training in law and medicine Apprenticeship in the practical trades
15. 15. What objection does Say make to Ricardo?

    He ignores the theory of rent altogether and explains every price by the cost of labour alone He reasons from abstractions to remote conclusions untested by experience He relies too heavily on statistical tables and historical detail, and so loses sight of principle He writes in a popular, anecdotal style that is unsuited to the dignity of a science
16. 16. On what principle does Say divide public charges between national and local taxation?

    All charges should fall on the land, the source of wealth Each should pay in proportion to the benefit it derives from the expenditure Local charges should be paid by the central treasury The wealthiest provinces should pay for the poorest
17. 17. Which ruler does Say quote as justifying his wars on the ground that his armies “promote the circulation of money”?

    Louis XIV, speaking to Madame de Maintenon Charles VI, advised by Prince Eugene Napoleon, addressing the Tribunate Frederick II of Prussia, writing to D’Alembert
18. 18. What reform of money does Say propose in his section “Of Money as It Ought to Be”?

    Paper notes should replace all metal coin Coins should be named by their weight of metal, as so many grammes of silver Coinage should be thrown open to private mints competing under public inspection Gold and silver should be fixed at a permanent legal ratio to each other by law
19. 19. What, according to Say, determines the rate of interest?

    The legal rate fixed by the government The quantity of gold and silver coin in the country The supply and demand of disposable capital, not the quantity of money The price of wheat in the previous year
20. 20. What does Say say about the popular notion that saving injures consumption?

    It is true, and therefore luxury and public spending should be encouraged It is true only when the saved money is lent to the government at interest It is true only of saving by the poor, who hoard their small sums in coin It is false: saved value is reinvested and so still consumed
21. 21. What does Say object to in the roads leading out of Paris?

    They are far wider than needed, wasting land and upkeep They were built by foreign contractors They are paid for by tolls on peasants They are too narrow for commercial traffic
22. 22. In Say’s example, what can the home maker of plates charge once a 20-cent duty is laid on foreign plates worth 60 cents a dozen?

    1 dollar 20 cents a dozen 80 cents a dozen 70 cents a dozen 60 cents a dozen
23. 23. When, according to Say, is a sinking fund “a complete delusion”?

    When the government keeps borrowing as much as it redeems When the debt bears less than 5 per cent interest When the debt is owed to foreigners When the fund is managed by private bankers
24. 24. What did Queen Christina of Sweden remark about the revocation of the Edict of Nantes?

    Paris had lost its best tradesmen to London Religion had become the enemy of commerce France had given Prussia its finest manufactures as a gift Louis XIV had used his right hand to cut off his left
25. 25. According to Say, what happened when Turgot ruled that doubtful points of fiscal law should be settled in the taxpayer’s favour?

    The tax-farmers went bankrupt The revenue fell by half The receipts actually increased The Parlement annulled the rule
26. 26. What contrast does Say draw to show that goods of general use command a larger and steadier demand than luxuries?

    Linen and silk Candlesticks and chandeliers Bread and pastry Wooden spoons and silver plate
27. 27. How, according to Say, do jurists define the right of property?

    The right of use or even abuse Possession sanctioned by long custom The right to what one has made with one’s own labour A trust held for the benefit of the community
28. 28. Which disadvantage of the division of labour does Say stress?

    It reduces the total product of society’s labour over time It degrades the faculties of the individual worker It raises the price of manufactured goods for the consumer It is impossible in large cities
29. 29. What annual rate of interest does Say calculate from King John’s letters patent of 1360 allowing the Jews to lend on pledges?

    More than 86 per cent More than 200 per cent About 30 per cent About 12 per cent
30. 30. What point does Say make with Homer’s report that Diomede’s armour cost nine oxen?

    Prices in antiquity were far lower than today Barter is more efficient than money in small and simple societies Money must be divisible to match the exact amount of a purchase Cattle were the first form of capital, long before any metal was coined
31. 31. According to Say, what determines which commodity serves as money?

    The quantity of labour needed to mine it Agreement among the great banks Custom, the spontaneous preference of those who trade The decree of the sovereign who stamps and issues the coin
32. 32. What does Say call the immediate consequence of debasing the coin?

    An increase in the real wealth of the nation A partial bankruptcy in which debtors gain what creditors lose A fall in the price of all commodities A permanent rise in the king’s revenue
33. 33. What change to Law’s bank-notes in 1719 does Say call radical?

    They were made payable only after a fixed date set by the Regent’s council They ceased to be payable to the bearer and required a written endorsement They were made payable only in gold coin of the newly fixed standard They promised livres of coin, not money of a fixed weight and standard
34. 34. Which product does Say follow from mine to consumer to show how the value of a product is distributed among its producers?

    A watch A woollen coat A pin A loaf of bread
35. 35. Which writer’s claim that national debt is “a debt from the right hand to the left” does Say reject?

    Necker Hume Sully Melon
36. 36. Which government enterprise does Say call “a source of perpetual impoverishment”?

    The royal veterinary college of Alfort The Gobelin tapestry manufacture The royal mint The canal of Languedoc
37. 37. What does Say call the price paid for the loan of capital?

    Rent Profit of the adventurer Wages Interest
38. 38. Why does Say deny that money is a measure of value?

    Money is only a sign of value Only labour can measure value Nothing has an invariable value, which a true measure requires Governments fix its value arbitrarily by law and alter it at will
39. 39. What does Say illustrate with porters who desire a coach and six?

    Luxury consumption stimulates production and so enriches the nation Monopoly raises the price of carriages and horses Workers spend their wages unwisely on things above their station Desire does not raise prices; demand is limited by the means to pay
40. 40. Which error does Say attribute to Adam Smith in the Introduction?

    Treating gold and silver as the whole of a nation’s wealth and capital Ascribing the power of producing values to human labour alone Denying that the division of labour raises the productivity of work Defending the mercantile system of trade restrictions
41. 41. To what does Say compare money employed in industry?

    The sails that catch the wind The oil that greases the wheels of a machine The seed sown by the husbandman The blood that circulates through the whole body
42. 42. Why does Say think mathematics cannot give greater precision to political economy?

    Governments keep the economic data needed for calculation secret from the public Prices are fixed by custom and law, so there is nothing for calculation to discover Mathematics applies only to the physical sciences, never to the conduct of men in society Values depend on human wants and cannot be rigorously measured
43. 43. Who acted as trustees of the deposits in the bank of Amsterdam?

    The directors of the Dutch East India Company The States-General of the Netherlands A board elected by the depositing merchants The four burgomasters of the city
44. 44. Why was Argand, inventor of the improved lamp, taken before the Parlement de Paris?

    He refused to pay the royal excise levied on all lamp oil sold in Paris Trade corporations claimed the exclusive right to make lamps His patent was challenged as not new He had smuggled English tools and skilled workmen into France illegally
45. 45. Which new product did the chambers of commerce say would leave France “watered with the tears of commerce”?

    English hardware Printed calicoes Beet sugar Straw hats
46. 46. What does Say conclude from the example of printing?

    Books became less valuable to readers The demand for books is fixed regardless of price A real fall in price so expanded consumption that total value rose Printing destroyed the livelihoods of copyists without compensation
47. 47. Complete Say’s image: “The gold buckles of the rich man leave the poor one …”

    without work in the winter without bread on his table without shoes to his feet without a roof over his head
48. 48. Why, according to Say, does land in the Sologne pay a very low rent?

    It is mostly owned by the Church, which leases it at nominal rents Without roads or water-carriage its produce is costly to market Its sandy soil is too poor to yield any crop worth the cost of tillage Heavy taxes and tithes absorb nearly the whole of its gross produce
49. 49. According to Say, why did the tenfold increase in silver after the discovery of America lower its value only to about a quarter?

    Governments hoarded most of the new silver in their treasuries and war-chests for generations Growing commerce, manufactures and luxury raised the demand for the metals at the same time Most of the new silver was lost at sea before reaching Europe Spain kept almost all the American silver at home, so that little of it ever reached the rest of Europe
50. 50. What does Say say would have followed if the Normandy spinners had succeeded in destroying the spinning-jennies?

    England would have been obliged to ban the jenny in her own mills Wages of the Normandy spinners would have doubled within a year The government would have compensated the spinners France would have had to abandon the cotton manufacture