Friday, September 21, 2007

What Do You Know?

The Intercollegiate Studies Institute has conducted its second test of how well American colleges teach their students about American history, government, international relations and the market economy. The idea is that in a democracy, the people who vote should have some idea about what they are doing and how it is all supposed to work.

Nice idea. The reality is they do not have a clue. Even at America's most prestigious schools, college seniors failed a basic test of America's history and institutions. In fact on average, the bigger the reputation of the college, the worse the score.

The result is an electorate of apparently well-educated college graduates who are nevertheless ignorant of the proper role of government in a free society. That makes it ever more likely that they will demand government intervention in areas that are politically popular, but economically unwise, areas like wage and price controls or government subsidies.

Ignorance of the proper role of government also makes it more likely that voters will fall prey to ambitious politicians who offer government intervention as an immediate and necessary solution to every problem or inconvenience, from terrorism to telemarketing.

Some of the findings:

*Seniors do not know basic facts of American history. Only 45.9% know that Yorktown was the battle that ended the American Revolution.

*Seniors do not know the basic timeline of American history. Only 47.7% know that Fort Sumter came before Gettysburg and that Gettysburg came before Appomattox.

*Seniors do not know America’s founding documents. Only 45.9% know that the line “We hold these truths to be self-evident, that all men are created equal” comes from the Declaration of Independence.

*Seniors do not know the rudiments of America’s historical relations with the world. Only 42.7% know that NATO was formed to resist Soviet expansion.

You can take the quiz yourself here. There are sixty multiple choice questions. Are you as smart as a Harvard senior? Odds are, you are.

Here are a few of the questions on free enterprise:

50) Free markets typically secure more economic prosperity than government’s centralized planning because:
A. the price system utilizes more local knowledge of means and ends.
B. markets rely upon coercion, whereas government relies upon voluntary compliance with the law.
C. more tax revenue can be generated from free enterprise.
D. property rights and contracts are best enforced by the market system.
E. government planners are too cautious in spending taxpayers’ money.

52) Business profit is:
A. cost minus revenue.
B. assets minus liabilities.
C. revenue minus expenses.
D. selling price of a stock minus its purchase price.
E. earnings minus assets.

53) National defense is considered a public good because:
A. a majority of citizens value it.
B. a resident can benefit from it without directly paying for it.
C. military contracts increase employment opportunities.
D. a majority of citizens support the military during war.
E. airport security personnel are members of the Federal civil service.

55) Over the past forty years, real income among American households has:
A. remained the same when averaged over all households.
B. involved the rich getting richer and the poor getting poorer.
C. involved the poor getting richer and the rich getting poorer.
D. decreased for the middle class and increased for the upper class.
E. increased for the lower and middle classes and increased most for the upper class.

56) Why are businesses in two different countries most likely to trade with each other?
A. They know that although one business will be hurt from trading, the other will be better off, and they both hope to be the winner.
B. Businesses are unable to sell their products in their own countries.
C. Each business expects to be better off as a result of the trade.
D. Their respective governments require them to do so.
E. The natural resources of both countries are similar.

57) The price of movie tickets has increased. According to the law of demand, what is likely to be the result?
A. Theaters will sell fewer tickets.
B. Theaters' revenues will increase.
C. The quality of movie theaters will improve.
D. The number of videos rented will decrease.
E. Popcorn purchases at theaters will increase.

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