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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 5, Fiscal Policy.

Multiple Choice Questions

1. 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 tax and provide responsively for the people.
(d) How to distribute wealth equitably.

2. What does Friedman believe coordinates individuals over vast distances and across all belief systems?
(a) The educational system.
(b) The geographic system.
(c) The price system.
(d) The electoral system.

3. Friedman asserts that government is needed for the ______.
(a) "Rules of the system."
(b) "Rules of the game."
(c) "Rules of the citizens."
(d) "Rules of the road."

4. Friedman defines a country as a collection of ______.
(a) Individuals.
(b) Leaders.
(c) Citizens.
(d) Ideals.

5. According to Friedman, the market enables wide diversity, meaning power can be located in ______.
(a) The hands of a few.
(b) Large pockets with limited interests.
(c) The hands of many.
(d) Small pockets of individual actors.

Short Answer Questions

1. Friedman advocates the end of ______.

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

3. According to Friedman, which of the following is the least bad?

4. The thought that the best use of government spending would be on useless projects is known as ______.

5. A key component of the government spending is the ______.

(see the answer key)

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