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The World's Easiest Economics Quiz

Dr. Walter E Williams is well known for being "The People's Economist" because he explains things in a way that ordinary people can understand. 

I'm told that the classes he teaches at George Mason University are among the most difficult the students there encounter on the way to their degrees. But for the rest of us, he makes things clear without even providing the answer to little quizzes like this one. I bet almost everyone aces it.
PS...  For admirers of Paul Krugman, the answers are found below.

1 = K  2 = B

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