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

2. What caused all the major nations to abandon the gold standard?
(a) The Great Depression.
(b) Decline in the value of gold.
(c) World War I.
(d) World War II.

3. According to Friedman, what is a necessary condition for political freedom?
(a) Competitive capitalism.
(b) Fair trade.
(c) A high gross domestic product.
(d) Governmental regulation.

4. In Friedman's eyes, individual activities correspond to game players as the framework of law corresponds to______.
(a) Players of the game.
(b) Finishers of the game.
(c) Rulers of the game.
(d) Leaders of the game.

5. According to Friedman, what is the Federal Reserve lacking?
(a) A Magna Carta of sorts.
(b) A Rosetta Stone of sorts.
(c) A Constitution of sorts.
(d) A Declaration of Independence of sorts.

Short Answer Questions

1. What does Friedman believe will markets do over time to monopolies?

2. What does Friedman use as an example of a use of government where individuals cannot consume individual amounts?

3. Friedman believes that free markets are not sufficient for political freedom since many countries demonstrate the possibility of ______.

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

5. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.

(see the answer key)

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