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

Multiple Choice Questions

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

2. According to Friedman, what is a necessary condition for political freedom?
(a) Fair trade.
(b) Governmental regulation.
(c) Competitive capitalism.
(d) A high gross domestic product.

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

4. Friedman makes the distinction between education and ______.
(a) Instruction.
(b) Aging.
(c) Schooling.
(d) Income.

5. Friedman states that the problem with teacher salaries is not that they are too low, but that they are ______.
(a) Not inclusive of benefits.
(b) Computed based on seniority.
(c) Linked to the amount of education the teacher has.
(d) The same regardless of quality.

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

7. What major event does Friedman strongly believe was a result of the government mishandling the money supply?
(a) Prohibition.
(b) World War I.
(c) The Great Depression.
(d) None of the answers is correct.

8. What does Friedman claim that governments abuse?
(a) Commodity standards.
(b) Ability to issue stocks.
(c) The power to determine taxes.
(d) The trust of the people.

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

10. What does Friedman prefer when it comes to exchange rates?
(a) Floating exchange rates.
(b) Hovering exchange rates.
(c) Sinking exchange rates.
(d) Rising exchange rates?

11. Friedman hypothesizes that the change from free market societies to economic controlled ones led classical liberals to worry that it would ______ political freedom.
(a) Strengthen.
(b) Weaken.
(c) Bolster.
(d) Undermine.

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

13. Friedman advocates that individuals should be able to buy and sell ______.
(a) Silver.
(b) Foreign currency.
(c) Gold.
(d) Stocks.

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

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

Short Answer Questions

1. What caused all the major nations to abandon the gold standard?

2. How are decisions, for Friedman, made where unanimity is a costly way of making decisions?

3. Friedman's evidence suggests that for every $100 of government spending, a certain amount is added to income. How much?

4. A major point for Friedman is that politics and economics are not ______.

5. Which of the following, for Friedman, is the most important factor for the Federal Reserve?

(see the answer keys)

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