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

Multiple Choice Questions

1. What does Friedman believe needs protection in order for the freedom of the market to arise?
(a) Religion.
(b) Citizens.
(c) Government.
(d) Contracts.

2. Friedman advocates that government should not be a master, but a/an ______.
(a) Mechanism.
(b) Philosophy.
(c) Instrument.
(d) Slave.

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

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

5. The thought that the best use of government spending would be on useless projects is known as ______.
(a) "Emptying the pot."
(b) "Filling holes."
(c) "Steaming the water."
(d) "Evening it out."

6. 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.

7. What caused all the major nations to abandon the gold standard?
(a) World War II.
(b) World War I.
(c) Decline in the value of gold.
(d) The Great Depression.

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

9. Friedman theorizes that in extreme cases where parents don't pay for schooling, the government could provide a ______.
(a) Allowance.
(b) Pass.
(c) Subsidy.
(d) Discount.

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

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. Friedman believes that one governmental action that is justifiable is to set a ______ education level.
(a) Rational.
(b) Minimum.
(c) Standard.
(d) Maximum.

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

14. A major point for Friedman is that politics and economics are not ______.
(a) Autonomous.
(b) United.
(c) Separate.
(d) Together.

15. What does Friedman believe coordinates individuals over vast distances and across all belief systems?
(a) The electoral system.
(b) The educational system.
(c) The geographic system.
(d) The price system.

Short Answer Questions

1. Past and current definitions of liberalism are the same with respect to ______.

2. The original balancing thought is based on whose economic philosophy?

3. In Friedman's eyes, individual activities correspond to game players as the framework of law corresponds to______.

4. According to Friedman, what conflicts with one another for men?

5. Friedman argues against the theory that $100 in government spending will increase income by ______.

(see the answer keys)

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