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

Multiple Choice Questions

1. In Friedman's eyes, individual activities correspond to game players as the framework of law corresponds to______.
(a) Rulers of the game.
(b) Players of the game.
(c) Finishers of the game.
(d) Leaders of the game.

2. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?
(a) 18th.
(b) 20th.
(c) 17th.
(d) 19th.

3. What does Friedman believe will become self-regulating?
(a) Monetary stocks.
(b) Exchange rates.
(c) The World Bank.
(d) The gold standard.

4. Friedman asserts that government is needed for the ______.
(a) "Rules of the system."
(b) "Rules of the road."
(c) "Rules of the citizens."
(d) "Rules of the game."

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

6. According to Friedman, what cannot exist without a literate and informed population?
(a) A well-armed militia.
(b) Democratic societies.
(c) First world countries.
(d) A progressive political system.

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

8. What term refers to the circumstance under which the action of one individual imposes significant costs on other individuals for which it is not feasible to make him compensate them?
(a) The future growth principle.
(b) The neighborhood effect.
(c) The common principle.
(d) The colleague effect.

9. According to Friedman, what conflicts with one another for men?
(a) Religious beliefs.
(b) Political ideology.
(c) Economic interests.
(d) Absolute freedom.

10. Past and current definitions of liberalism are the same with respect to ______.
(a) Paternalism and individualism.
(b) Distribution of wealth and the welfare state.
(c) Free markets and the rule of law.
(d) Civil freedoms and democracy.

11. What is the name of the system with the purpose of regulating monetary policy between leading countries?
(a) The World Bank System.
(b) The Gold Standard System.
(c) The International Monetary System.
(d) The Bretton Woods System.

12. What term refers to the Federal Reserve's ability to produce more money than is deposited?
(a) Overdraft protection.
(b) Percent fulfillment banking.
(c) Reserve ability production.
(d) Fractional reserve banking.

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

14. What does Friedman use as an example of a use of government where individuals cannot consume individual amounts?
(a) National defense.
(b) Postal service.
(c) Education.
(d) Healthcare.

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

Short Answer Questions

1. Friedman believes that vocational and professional schools should be totally ______ run.

2. The thought that the best use of government spending would be on useless projects is known as ______.

3. Which term refers to the government stimulating spending?

4. According to Friedman, what is liberty's greatest enemy?

5. Friedman believes that free markets are not sufficient for political freedom since many countries demonstrate the possibility of ______.

(see the answer keys)

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