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. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?
(a) 19th.
(b) 18th.
(c) 17th.
(d) 20th.

2. Friedman states that government should be ______.
(a) Destroyed.
(b) Expanded.
(c) Limited.
(d) Held accountable.

3. Which term describes the purpose of federal spending?
(a) "Seesaw."
(b) "Balance beam."
(c) "Balance wheel."
(d) None of the answers is correct.

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

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

6. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.
(a) 1920-21.
(b) 1926-27.
(c) 1937-38.
(d) 1929-33.

7. What does Friedman prefer when it comes to exchange rates?
(a) Rising exchange rates?
(b) Hovering exchange rates.
(c) Floating exchange rates.
(d) Sinking exchange rates.

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

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

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

11. In the market described by Friedman, exchanges between households are ______.
(a) Obligatory.
(b) Unwilling.
(c) Coerced.
(d) Voluntary.

12. Which of the following does Friedman dispute?
(a) The gold standard for backing money is good.
(b) Government should stay out of individual economic choices.
(c) A free market economic system works.
(d) The Central Bank holds too much power.

13. Friedman advocates that government should not be a master, but a/an ______.
(a) Slave.
(b) Instrument.
(c) Mechanism.
(d) Philosophy.

14. What does Friedman believe coordinates individuals over vast distances and across all belief systems?
(a) The geographic system.
(b) The price system.
(c) The electoral system.
(d) The educational system.

15. For Friedman, what is something that when privately owned can be used if the price is right?
(a) Media.
(b) Political campaigns.
(c) Educational systems.
(d) Taxes.

Short Answer Questions

1. Friedman believes that economic control can lead to infringements on ______.

2. What term refers to the Federal Reserve's ability to produce more money than is deposited?

3. Friedman believes that one governmental action that is justifiable is to set a ______ education level.

4. The thought that the best use of government spending would be on useless projects is known as ______.

5. How are decisions, for Friedman, made where unanimity is a costly way of making decisions?

(see the answer keys)

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