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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3, The Control of Money.

Multiple Choice Questions

1. What is the basic problem of social life for Friedman?
(a) How to tax and provide responsively for the people.
(b) How to distribute wealth equitably.
(c) How to coordinate the economic activities of large numbers of individuals.
(d) How to provide for entertainment opportunities.

2. Who does Friedman state rejects the view that the government is the patron or master of the citizenry?
(a) The free man.
(b) The poor man.
(c) The educated man.
(d) The rich man.

3. What does Friedman believe is an appropriate rate of increase for the Federal Reserve?
(a) 5%-7%.
(b) 3%-5%.
(c) None. That is not a goal of the Federal Reserve.
(d) 1%-3%.

4. What does Friedman believe is one drawback of the Federal Reserve having so much power?
(a) The Federal Reserve has rules that are too strict to follow in order to make any real change.
(b) The Federal Reserve chairperson is elected and therefore subject to the whims of the public.
(c) When the Federal Reserve does well, only a few profit.
(d) When the Federal Reserve makes mistakes, the whole country suffers.

5. A common misunderstanding of economic freedom, according to Friedman, is that it emphasizes ______.
(a) Socialism.
(b) Wealth.
(c) Prosperity.
(d) Materialism.

Short Answer Questions

1. Originally, liberalism fought for freedom of thought, free-markets, free trade, constitutionalism, representative government, and ______.

2. Friedman states that government should be ______.

3. A major point for Friedman is that politics and economics are not ______.

4. In the market described by Friedman, exchanges between households are ______.

5. Friedman believes that government that has the power to do good, also has the power to do ______.

(see the answer key)

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