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

Multiple Choice Questions

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

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

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

4. Which of the following cannot be justified by Friedman for government interventions?
(a) Public parks.
(b) Roads.
(c) Vouchers for education.
(d) Free speech.

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

6. Friedman believes that all of the following are appropriate for fiscal policy except ______.
(a) Avoiding erratic changes in spending.
(b) Fluctuating in spending based on the political climate.
(c) Spending based on community priorities.
(d) Planning for stable tax rates.

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

8. One question Friedman asks is how we can stop government from destroying ______.
(a) Freedom.
(b) Taxes.
(c) Citizens.
(d) Entertainment.

9. Which of the following can be justified by Friedman for government interventions?
(a) The draft.
(b) Property rights.
(c) Subsidizing farm production.
(d) Minimum wage.

10. Friedman states that government should be ______.
(a) Incorporated.
(b) Consolidated.
(c) Streamlined.
(d) Decentralized.

11. One solution Friedman proposes is to give parents ______ for schooling.
(a) Vouchers.
(b) Coupons.
(c) Credits.
(d) Tokens.

12. Which of the following, for Friedman, is the most important factor for the Federal Reserve?
(a) Regulation of the market.
(b) Loans and lending practices.
(c) Stability.
(d) Economic growth.

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

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

15. According to Friedman, whom does free trade benefit?
(a) The wealthier trading country.
(b) Neither trading country.
(c) Both trading countries.
(d) The poorer trading country.

Short Answer Questions

1. What does Friedman use as an example of a use of government where individuals cannot consume individual amounts?

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

3. Friedman makes the distinction between education and ______.

4. In Friedman's mind, why is centralization attractive to many?

5. According to Friedman, it can be argued that private schools ______ class distinctions, and therefore need government intervention.

(see the answer keys)

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