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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. Friedman asserts that government restriction centralizes ______.
(a) Power.
(b) Elitism.
(c) Wealth.
(d) Goods.

2. What caused all the major nations to abandon the gold standard?
(a) World War II.
(b) World War I.
(c) Decline in the value of gold.
(d) The Great Depression.

3. Instead of government spending, what does Friedman advocate the government use to stabilize the economy?
(a) Welfare.
(b) Unemployment.
(c) Health care.
(d) Taxes.

4. Which term describes the purpose of federal spending?
(a) "Balance wheel."
(b) None of the answers is correct.
(c) "Balance beam."
(d) "Seesaw."

5. What is one way Friedman believes some people criticize markets?
(a) It gives people what they want.
(b) It inequitably distributes wealth.
(c) It limits people's choices.
(d) It hurts those in power.

Short Answer Questions

1. What term refers to the Federal Reserve's ability to produce more money than is deposited?

2. Friedman's analysis of government argues that it is not ______.

3. Friedman uses the example of selling ______ to demonstrate a true global economy.

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

5. Besides enforcing contracts, what one other thing does Friedman say government should do?

(see the answer key)

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