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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 hypothesizes that the change from free market societies to economic controlled ones led classical liberals to worry that it would ______ political freedom.
(a) Strengthen.
(b) Undermine.
(c) Bolster.
(d) Weaken.

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

3. In Friedman's opinion, what should individuals be allowed to do?
(a) Elect their own leaders.
(b) Choose their own religion.
(c) Print their own money.
(d) Pursue their own ends.

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

5. Friedman uses the example of selling ______ to demonstrate a true global economy.
(a) Oil.
(b) Rice.
(c) Corn.
(d) Wheat.

Short Answer Questions

1. According to Friedman, what is lost when foreign exchange is controlled by the government?

2. The original balancing thought is based on whose economic philosophy?

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

4. Friedman asserts that government is needed for the ______.

5. Friedman asserts that current liberalism is tied to the state management of ______.

(see the answer key)

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