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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 5, Fiscal Policy.

Multiple Choice Questions

1. What does Friedman claim that governments abuse?
(a) Commodity standards.
(b) The trust of the people.
(c) The power to determine taxes.
(d) Ability to issue stocks.

2. One role of government argued by the New Deal was to ______.
(a) Provide subsidies for the poor.
(b) Eliminate excessive alcohol drinking.
(c) Regulate military spending.
(d) Even out economic cycles.

3. What does Friedman believe coordinates individuals over vast distances and across all belief systems?
(a) The geographic system.
(b) The price system.
(c) The electoral system.
(d) The educational system.

4. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.
(a) 1937-38.
(b) 1920-21.
(c) 1926-27.
(d) 1929-33.

5. One argument for government spending that Friedman refutes is that it will reduce what?
(a) Fraud.
(b) Competition.
(c) Unemployment.
(d) Crime.

Short Answer Questions

1. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?

2. Friedman asserts that government restriction centralizes ______.

3. Friedman asserts that government is needed for the ______.

4. In Friedman's opinion, what should individuals be allowed to do?

5. What is the term for currency not being traded for any amount of another currency?

(see the answer key)

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