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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's belief is that what cause would free trade substantially promote, both domestically and internationally?
(a) Political power.
(b) Regulation.
(c) Currency exchange.
(d) Freedom.

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

3. For Friedman, what is an all-embracing ethic?
(a) Education.
(b) Government.
(c) Freedom.
(d) Religion.

4. According to Friedman, what is lost when foreign exchange is controlled by the government?
(a) Religious freedom.
(b) Political freedom.
(c) Economic freedom.
(d) Educational freedom.

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

Short Answer Questions

1. Friedman defines a country as a collection of ______.

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

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

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

5. A common misunderstanding of economic freedom, according to Friedman, is that it emphasizes ______.

(see the answer key)

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