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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3, The Control of Money.

Multiple Choice Questions

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

2. How are decisions, for Friedman, made where unanimity is a costly way of making decisions?
(a) Executive decision.
(b) A system of checks and balances.
(c) Majority rule.
(d) Decisions by committee.

3. Friedman points out one idea that is often forgotten is that political and economic institutions have been ______.
(a) Unfree.
(b) Free.
(c) Autonomic.
(d) Suppressed.

4. Friedman believes that free markets are not sufficient for political freedom since many countries demonstrate the possibility of ______.
(a) Authoritarian capitalism.
(b) Laissez-faire markets.
(c) Economic freedom.
(d) Dictatorial government.

5. What term refers to the Federal Reserve's ability to produce more money than is deposited?
(a) Fractional reserve banking.
(b) Percent fulfillment banking.
(c) Reserve ability production.
(d) Overdraft protection.

Short Answer Questions

1. Which of the following, for Friedman, is the most important factor for the Federal Reserve?

2. According to Friedman, the market enables wide diversity, meaning power can be located in ______.

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

4. Friedman advocates that government should not be a master, but a/an ______.

5. Which of the following cannot be justified by Friedman for government interventions?

(see the answer key)

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