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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, what is liberty's greatest enemy?
(a) The Federal government.
(b) Elected leaders.
(c) The educational system.
(d) Concentration of power.

2. Friedman advocates that individuals should be able to buy and sell ______.
(a) Foreign currency.
(b) Stocks.
(c) Silver.
(d) Gold.

3. What is the basic problem of social life for Friedman?
(a) How to coordinate the economic activities of large numbers of individuals.
(b) How to provide for entertainment opportunities.
(c) How to distribute wealth equitably.
(d) How to tax and provide responsively for the people.

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

5. What does Friedman believe is an appropriate rate of increase for the Federal Reserve?
(a) 5%-7%.
(b) 3%-5%.
(c) None. That is not a goal of the Federal Reserve.
(d) 1%-3%.

Short Answer Questions

1. What does Friedman believe will become self-regulating?

2. Who does Friedman think should set exchange rates?

3. Friedman hypothesizes that the change from free market societies to economic controlled ones led classical liberals to worry that it would ______ political freedom.

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

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

(see the answer key)

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