Capitalism and Freedom Test | Mid-Book Test - Easy

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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. According to Friedman, what cannot exist without a literate and informed population?
(a) Democratic societies.
(b) First world countries.
(c) A progressive political system.
(d) A well-armed militia.

2. Friedman believes that government that has the power to do good, also has the power to do ______.
(a) Nothing.
(b) Right.
(c) Bad.
(d) Wrong.

3. Friedman's analysis of government argues that it is not ______.
(a) Expansionary.
(b) Contractionary.
(c) Reductionary.
(d) Stagnantary.

4. Who does Friedman think should set exchange rates?
(a) No one, they should be allowed to fluctuate on their own.
(b) The White House.
(c) The Federal Reserve.
(d) The International Monetary Fund.

5. One of Friedman's claims for government involvement in education asserts that there are ______ to education.
(a) Negative externalities.
(b) Minimal costs.
(c) Extreme costs.
(d) Positive externalities.

6. Which type of education does Friedman not advocate the government paying for?
(a) Vocational.
(b) Minimal.
(c) Industrial.
(d) Liberal.

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

8. What is the name of the system with the purpose of regulating monetary policy between leading countries?
(a) The International Monetary System.
(b) The Gold Standard System.
(c) The Bretton Woods System.
(d) The World Bank System.

9. What term refers to the argument for education that parents will not do best for their children?
(a) Sacrificial.
(b) Paternalistic.
(c) Employment.
(d) Maternalistic.

10. Besides enforcing contracts, what one other thing does Friedman say government should do?
(a) Regulate commerce.
(b) Protect against external threats.
(c) Secure a country's borders.
(d) Provide for public transportation.

11. Friedman's theory on government intervention is that government is needed to be what regarding disputes?
(a) Announcer.
(b) Groundskeeper.
(c) Fan.
(d) Umpire.

12. One question Friedman asks is how we can stop government from destroying ______.
(a) Freedom.
(b) Citizens.
(c) Taxes.
(d) Entertainment.

13. What is one example of a negative externality?
(a) Private education.
(b) Pollution.
(c) Lack of voting.
(d) Welfare.

14. Friedman advocates the end of ______.
(a) Capitalism.
(b) Export quotas.
(c) Exchange rates.
(d) The free market.

15. According to Friedman, what conflicts with one another for men?
(a) Political ideology.
(b) Absolute freedom.
(c) Economic interests.
(d) Religious beliefs.

Short Answer Questions

1. What is the basic problem of social life for Friedman?

2. In Friedman's mind, why is centralization attractive to many?

3. What does Friedman prefer when it comes to exchange rates?

4. Which of the following cannot be justified by Friedman for government interventions?

5. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.

(see the answer keys)

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