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

Multiple Choice Questions

1. Friedman asserts that current liberalism is tied to the state management of ______.
(a) The educational system.
(b) Social welfare.
(c) The economy.
(d) The electoral vote.

2. In the market described by Friedman, exchanges between households are ______.
(a) Voluntary.
(b) Unwilling.
(c) Coerced.
(d) Obligatory.

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

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

5. According to Friedman, what is the Federal Reserve lacking?
(a) A Magna Carta of sorts.
(b) A Constitution of sorts.
(c) A Declaration of Independence of sorts.
(d) A Rosetta Stone of sorts.

6. Friedman asserts that government restriction centralizes ______.
(a) Goods.
(b) Elitism.
(c) Wealth.
(d) Power.

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

8. Instead of government spending, what does Friedman advocate the government use to stabilize the economy?
(a) Welfare.
(b) Taxes.
(c) Unemployment.
(d) Health care.

9. What does Friedman believe is one drawback of the Federal Reserve having so much power?
(a) The Federal Reserve chairperson is elected and therefore subject to the whims of the public.
(b) When the Federal Reserve does well, only a few profit.
(c) When the Federal Reserve makes mistakes, the whole country suffers.
(d) The Federal Reserve has rules that are too strict to follow in order to make any real change.

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

11. Friedman states that government should be ______.
(a) Destroyed.
(b) Expanded.
(c) Limited.
(d) Held accountable.

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

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

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

15. How are decisions, for Friedman, made where unanimity is a costly way of making decisions?
(a) Executive decision.
(b) Majority rule.
(c) Decisions by committee.
(d) A system of checks and balances.

Short Answer Questions

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

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

3. What does Friedman believe will markets do over time to monopolies?

4. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.

5. In Friedman's time, what was illegal to buy or sell?

(see the answer keys)

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