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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. In Friedman's mind, why is centralization attractive to many?
(a) Consolidation of power.
(b) Government can promote the public interest.
(c) Streamlined services.
(d) Better pool of resources.

2. What does Friedman assert is an example of an appropriate task for government?
(a) Determining price.
(b) Regulating the job market.
(c) Defining property rights.
(d) Providing for the social welfare.

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

4. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.
(a) 1929-33.
(b) 1937-38.
(c) 1926-27.
(d) 1920-21.

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

Short Answer Questions

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

2. Friedman asserts that current liberalism is tied to the state management of ______.

3. In Chapter 3, what does Friedman provide a history of?

4. Which of the following, for Friedman, is the most important factor for the Federal Reserve?

5. Friedman believes that government that has the power to do good, also has the power to do ______.

(see the answer key)

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