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. What term refers to the Federal Reserve's ability to produce more money than is deposited?
(a) Fractional reserve banking.
(b) Reserve ability production.
(c) Overdraft protection.
(d) Percent fulfillment banking.

2. According to Friedman, what is the Federal Reserve lacking?
(a) A Constitution of sorts.
(b) A Declaration of Independence of sorts.
(c) A Rosetta Stone of sorts.
(d) A Magna Carta of sorts.

3. Friedman defines a country as a collection of ______.
(a) Citizens.
(b) Individuals.
(c) Ideals.
(d) Leaders.

4. According to Friedman, whom does free trade benefit?
(a) Neither trading country.
(b) Both trading countries.
(c) The poorer trading country.
(d) The wealthier trading country.

5. The original balancing thought is based on whose economic philosophy?
(a) Krugman.
(b) Smith.
(c) Keynes.
(d) Marx.

6. In Friedman's time, what was illegal to buy or sell?
(a) Alcohol.
(b) Gold.
(c) Ethanol.
(d) Silver.

7. Friedman uses the example of selling ______ to demonstrate a true global economy.
(a) Wheat.
(b) Rice.
(c) Corn.
(d) Oil.

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

9. What is one way Friedman believes some people criticize markets?
(a) It inequitably distributes wealth.
(b) It hurts those in power.
(c) It gives people what they want.
(d) It limits people's choices.

10. In Friedman's opinion, what will check government power?
(a) The people.
(b) A tripartite government.
(c) A free market.
(d) A strong judicial system.

11. 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) "Steaming the water."
(d) "Filling holes."

12. Friedman believes that vocational and professional schools should be totally ______ run.
(a) Governmentally.
(b) Privately.
(c) Cooperatively.
(d) Publicly.

13. Which of the following cannot be justified by Friedman for government interventions?
(a) Public parks.
(b) Vouchers for education.
(c) Roads.
(d) Free speech.

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

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

Short Answer Questions

1. Friedman advocates the end of ______.

2. For Friedman, where is the best place for power to be held?

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

4. What does Friedman believe needs protection in order for the freedom of the market to arise?

5. One question Friedman asks is how we can stop government from destroying ______.

(see the answer keys)

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