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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. Which type of education does Friedman not advocate the government paying for?
(a) Minimal.
(b) Vocational.
(c) Industrial.
(d) Liberal.

2. Friedman points out one idea that is often forgotten is that political and economic institutions have been ______.
(a) Autonomic.
(b) Unfree.
(c) Suppressed.
(d) Free.

3. By Friedman's account, the market permits unanimity without ______.
(a) Solitude.
(b) Freedom.
(c) Resentment.
(d) Conformity.

4. Originally, liberalism fought for freedom of thought, free-markets, free trade, constitutionalism, representative government, and ______.
(a) Rights of the poor.
(b) A welfare state.
(c) Fair trade.
(d) The rule of law.

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

6. Which of the following does Friedman dispute?
(a) The gold standard for backing money is good.
(b) A free market economic system works.
(c) The Central Bank holds too much power.
(d) Government should stay out of individual economic choices.

7. Friedman's evidence suggests that for every $100 of government spending, a certain amount is added to income. How much?
(a) $50.
(b) $150.
(c) $100.
(d) $300.

8. One argument for government spending that Friedman refutes is that it will reduce what?
(a) Unemployment.
(b) Fraud.
(c) Crime.
(d) Competition.

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

10. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.
(a) 1929-33.
(b) 1937-38.
(c) 1920-21.
(d) 1926-27.

11. In Chapter 3, what does Friedman provide a history of?
(a) British colonialism.
(b) American monetary policy.
(c) World War I.
(d) The Federal Reserve System.

12. The original balancing thought is based on whose economic philosophy?
(a) Krugman.
(b) Smith.
(c) Marx.
(d) Keynes.

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

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

15. Friedman's theory is that monetary exchange rates will allow trades across countries to ______ in accord with those rates.
(a) Stagnate.
(b) Equilibrate.
(c) Increase.
(d) Decrease.

Short Answer Questions

1. Friedman advocates the end of ______.

2. Friedman believes that one governmental action that is justifiable is to set a ______ education level.

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

4. Friedman's belief is that what cause would free trade substantially promote, both domestically and internationally?

5. According to Friedman, what is one problem with government stimulus during a recession?

(see the answer keys)

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