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. Friedman's evidence suggests that for every $100 of government spending, a certain amount is added to income. How much?
(a) $150.
(b) $300.
(c) $100.
(d) $50.

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

3. Friedman believes that all of the following are appropriate for fiscal policy except ______.
(a) Spending based on community priorities.
(b) Planning for stable tax rates.
(c) Fluctuating in spending based on the political climate.
(d) Avoiding erratic changes in spending.

4. According to Friedman, what is one problem with government stimulus during a recession?
(a) The stimulus is generally too small to jump-start the economy.
(b) More often than not, inflation skyrockets.
(c) The measures do not take effect until after the recession.
(d) The attempts often have a negative effect.

5. Who does Friedman state rejects the view that the government is the patron or master of the citizenry?
(a) The free man.
(b) The educated man.
(c) The poor man.
(d) The rich man.

6. Friedman states that the problem with teacher salaries is not that they are too low, but that they are ______.
(a) The same regardless of quality.
(b) Computed based on seniority.
(c) Linked to the amount of education the teacher has.
(d) Not inclusive of benefits.

7. Friedman makes the distinction between education and ______.
(a) Income.
(b) Instruction.
(c) Aging.
(d) Schooling.

8. One solution Friedman proposes is to give parents ______ for schooling.
(a) Tokens.
(b) Vouchers.
(c) Credits.
(d) Coupons.

9. For Friedman, where is the best place for power to be held?
(a) At the federal level.
(b) In the states.
(c) In the economic system.
(d) In the local community.

10. What does Friedman believe is an appropriate rate of increase for the Federal Reserve?
(a) None. That is not a goal of the Federal Reserve.
(b) 3%-5%.
(c) 1%-3%.
(d) 5%-7%.

11. What major event does Friedman strongly believe was a result of the government mishandling the money supply?
(a) World War I.
(b) Prohibition.
(c) None of the answers is correct.
(d) The Great Depression.

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

13. A common misunderstanding of economic freedom, according to Friedman, is that it emphasizes ______.
(a) Wealth.
(b) Prosperity.
(c) Materialism.
(d) Socialism.

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

15. A major point for Friedman is that politics and economics are not ______.
(a) Together.
(b) Separate.
(c) United.
(d) Autonomous.

Short Answer Questions

1. What does Friedman believe will become self-regulating?

2. What caused all the major nations to abandon the gold standard?

3. Friedman theorizes that in extreme cases where parents don't pay for schooling, the government could provide a ______.

4. Friedman argues against the theory that $100 in government spending will increase income by ______.

5. Past and current definitions of liberalism are the same with respect to ______.

(see the answer keys)

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