|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. In the market described by Friedman, exchanges between households are ______.
2. What term refers to the circumstance under which the action of one individual imposes significant costs on other individuals for which it is not feasible to make him compensate them?
(a) The future growth principle.
(b) The colleague effect.
(c) The neighborhood effect.
(d) The common principle.
3. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?
4. What does Friedman use as an example of a use of government where individuals cannot consume individual amounts?
(a) National defense.
(c) Postal service.
5. Friedman makes the distinction between education and ______.
6. Friedman hypothesizes that the change from free market societies to economic controlled ones led classical liberals to worry that it would ______ political freedom.
7. Friedman defines a country as a collection of ______.
8. One role of government argued by the New Deal was to ______.
(a) Eliminate excessive alcohol drinking.
(b) Provide subsidies for the poor.
(c) Regulate military spending.
(d) Even out economic cycles.
9. According to Friedman, it can be argued that private schools ______ class distinctions, and therefore need government intervention.
10. By Friedman's account, the market permits unanimity without ______.
11. Friedman argues against the theory that $100 in government spending will increase income by ______.
12. According to Friedman, what is a necessary condition for political freedom?
(a) Competitive capitalism.
(b) Governmental regulation.
(c) A high gross domestic product.
(d) Fair trade.
13. What is one example of a negative externality?
(b) Private education.
(d) Lack of voting.
14. Which term describes the purpose of federal spending?
(a) None of the answers is correct.
(b) "Balance beam."
(c) "Balance wheel."
15. What does Friedman believe is an appropriate rate of increase for the Federal Reserve?
(d) None. That is not a goal of the Federal Reserve.
Short Answer Questions
1. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.
2. According to Friedman, which of the following is the least bad?
3. What term refers to the argument for education that parents will not do best for their children?
4. What does Friedman believe will markets do over time to monopolies?
5. According to Friedman, what conflicts with one another for men?
This section contains 408 words
(approx. 2 pages at 300 words per page)