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

2. Friedman asserts that government restriction centralizes ______.
(a) Power.
(b) Goods.
(c) Elitism.
(d) Wealth.

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

4. Which of the following, for Friedman, is the most important factor for the Federal Reserve?
(a) Regulation of the market.
(b) Stability.
(c) Loans and lending practices.
(d) Economic growth.

5. One question Friedman asks is how we can stop government from destroying ______.
(a) Entertainment.
(b) Freedom.
(c) Taxes.
(d) Citizens.

Short Answer Questions

1. In the market described by Friedman, exchanges between households are ______.

2. According to Friedman, what is the Federal Reserve lacking?

3. A major point for Friedman is that politics and economics are not ______.

4. What does Friedman assert is an example of an appropriate task for government?

5. In Friedman's opinion, what will check government power?

(see the answer key)

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