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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. Friedman advocates that individuals should be able to buy and sell ______.
(a) Gold.
(b) Stocks.
(c) Silver.
(d) Foreign currency.

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

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

4. What does Friedman believe is one drawback of the Federal Reserve having so much power?
(a) The Federal Reserve has rules that are too strict to follow in order to make any real change.
(b) When the Federal Reserve does well, only a few profit.
(c) The Federal Reserve chairperson is elected and therefore subject to the whims of the public.
(d) When the Federal Reserve makes mistakes, the whole country suffers.

5. According to Friedman, what is lost when foreign exchange is controlled by the government?
(a) Religious freedom.
(b) Political freedom.
(c) Economic freedom.
(d) Educational freedom.

Short Answer Questions

1. A common misunderstanding of economic freedom, according to Friedman, is that it emphasizes ______.

2. Friedman points out one idea that is often forgotten is that political and economic institutions have been ______.

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

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

5. What is one way Friedman believes some people criticize markets?

(see the answer key)

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