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

2. In Friedman's opinion, what should individuals be allowed to do?
(a) Elect their own leaders.
(b) Print their own money.
(c) Choose their own religion.
(d) Pursue their own ends.

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) Fractional reserve banking.
(d) Reserve ability production.

4. Friedman believes that economic control can lead to infringements on ______.
(a) International trade.
(b) Social welfare.
(c) Licensing requirements.
(d) Liberties.

5. What major event does Friedman strongly believe was a result of the government mishandling the money supply?
(a) None of the answers is correct.
(b) The Great Depression.
(c) Prohibition.
(d) World War I.

Short Answer Questions

1. What is one example of a negative externality?

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

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

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

5. Friedman asserts that government is needed for the ______.

(see the answer key)

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