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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. According to Friedman, whom does free trade benefit?
(a) The poorer trading country.
(b) Both trading countries.
(c) Neither trading country.
(d) The wealthier trading country.

2. What does Friedman claim that governments abuse?
(a) Commodity standards.
(b) The trust of the people.
(c) Ability to issue stocks.
(d) The power to determine taxes.

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

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

5. What is one example of a negative externality?
(a) Lack of voting.
(b) Pollution.
(c) Private education.
(d) Welfare.

Short Answer Questions

1. One question Friedman asks is how we can stop government from destroying ______.

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

3. Friedman advocates that individuals should be able to buy and sell ______.

4. Friedman states that government should be ______.

5. What does Friedman believe is one drawback of the Federal Reserve having so much power?

(see the answer key)

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