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

2. Friedman states that government should be ______.
(a) Destroyed.
(b) Limited.
(c) Held accountable.
(d) Expanded.

3. What does Friedman believe will markets do over time to monopolies?
(a) Break them up.
(b) Separate them slowly.
(c) Strengthen them.
(d) Make them obsolete.

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

5. Past and current definitions of liberalism are the same with respect to ______.
(a) Civil freedoms and democracy.
(b) Distribution of wealth and the welfare state.
(c) Free markets and the rule of law.
(d) Paternalism and individualism.

Short Answer Questions

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

2. For Friedman, what is an all-embracing ethic?

3. Besides enforcing contracts, what one other thing does Friedman say government should do?

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

5. What does Friedman claim that governments abuse?

(see the answer key)

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