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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 does Friedman say can government not duplicate?
(a) The power of local control.
(b) An international monitoring system.
(c) The creativity of the individual.
(d) The free market economic system.

2. For Friedman, what is something that when privately owned can be used if the price is right?
(a) Taxes.
(b) Political campaigns.
(c) Educational systems.
(d) Media.

3. The thought that the best use of government spending would be on useless projects is known as ______.
(a) "Filling holes."
(b) "Evening it out."
(c) "Steaming the water."
(d) "Emptying the pot."

4. In Friedman's mind, why is centralization attractive to many?
(a) Consolidation of power.
(b) Better pool of resources.
(c) Streamlined services.
(d) Government can promote the public interest.

5. Besides enforcing contracts, what one other thing does Friedman say government should do?
(a) Provide for public transportation.
(b) Regulate commerce.
(c) Secure a country's borders.
(d) Protect against external threats.

Short Answer Questions

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

2. What does Friedman believe is one drawback of the Federal Reserve having so much power?

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

4. According to Friedman, what is a necessary condition for political freedom?

5. What is the name of the system with the purpose of regulating monetary policy between leading countries?

(see the answer key)

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