Capitalism and Freedom Quiz | Eight Week Quiz D

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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. Friedman points out one idea that is often forgotten is that political and economic institutions have been ______.
(a) Unfree.
(b) Free.
(c) Suppressed.
(d) Autonomic.

2. A key component of the government spending is the ______.
(a) Substitution effect.
(b) Multiplier effect.
(c) Reduction effect.
(d) Externality effect.

3. What is the term for currency not being traded for any amount of another currency?
(a) Unconvertible.
(b) None of the answers is correct.
(c) Inconvertible.
(d) Irreversible.

4. Friedman argues against the theory that $100 in government spending will increase income by ______.
(a) $100.
(b) $150.
(c) $50.
(d) $300.

5. The thought that the best use of government spending would be on useless projects is known as ______.
(a) "Evening it out."
(b) "Emptying the pot."
(c) "Filling holes."
(d) "Steaming the water."

Short Answer Questions

1. In Friedman's eyes, individual activities correspond to game players as the framework of law corresponds to______.

2. By Friedman's account, the market permits unanimity without ______.

3. Friedman states that government should be ______.

4. What does Friedman assert is an example of an appropriate task for government?

5. What is the name of the system with the purpose of regulating monetary policy between leading countries?

(see the answer key)

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