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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's theory on government intervention is that government is needed to be what regarding disputes?
(a) Umpire.
(b) Groundskeeper.
(c) Announcer.
(d) Fan.

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

3. Friedman hypothesizes that the change from free market societies to economic controlled ones led classical liberals to worry that it would ______ political freedom.
(a) Undermine.
(b) Bolster.
(c) Strengthen.
(d) Weaken.

4. Friedman believes that government that has the power to do good, also has the power to do ______.
(a) Bad.
(b) Nothing.
(c) Wrong.
(d) Right.

5. One role of government argued by the New Deal was to ______.
(a) Regulate military spending.
(b) Even out economic cycles.
(c) Provide subsidies for the poor.
(d) Eliminate excessive alcohol drinking.

Short Answer Questions

1. How are decisions, for Friedman, made where unanimity is a costly way of making decisions?

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

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

4. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?

5. For Friedman, where is the best place for power to be held?

(see the answer key)

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