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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 4, International and Financial Trade Arrangements.

Multiple Choice Questions

1. Friedman points out one idea that is often forgotten is that political and economic institutions have been ______.
(a) Unfree.
(b) Suppressed.
(c) Autonomic.
(d) Free.

2. A common misunderstanding of economic freedom, according to Friedman, is that it emphasizes ______.
(a) Materialism.
(b) Prosperity.
(c) Socialism.
(d) Wealth.

3. Which of the following does Friedman dispute?
(a) A free market economic system works.
(b) The Central Bank holds too much power.
(c) The gold standard for backing money is good.
(d) Government should stay out of individual economic choices.

4. Who does Friedman think should set exchange rates?
(a) The International Monetary Fund.
(b) The White House.
(c) No one, they should be allowed to fluctuate on their own.
(d) The Federal Reserve.

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

Short Answer Questions

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

2. According to Friedman, what is lost when foreign exchange is controlled by the government?

3. What does Friedman say can government not duplicate?

4. In Friedman's mind, why is centralization attractive to many?

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

(see the answer key)

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