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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 7, Capitalism and Discrimination.

Multiple Choice Questions

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

2. According to Friedman, the market enables wide diversity, meaning power can be located in ______.
(a) The hands of many.
(b) Small pockets of individual actors.
(c) Large pockets with limited interests.
(d) The hands of a few.

3. Friedman's belief is that what cause would free trade substantially promote, both domestically and internationally?
(a) Freedom.
(b) Currency exchange.
(c) Political power.
(d) Regulation.

4. What example does Friedman use to demonstrate his views on employment practices?
(a) A grocer.
(b) A blacksmith.
(c) A baker.
(d) A lawyer.

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

Short Answer Questions

1. What major event does Friedman strongly believe was a result of the government mishandling the money supply?

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

3. One role of government argued by the New Deal was to ______.

4. What term refers to the argument for education that parents will not do best for their children?

5. What does Friedman claim that governments abuse?

(see the answer key)

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