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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

2. What does Friedman believe will markets do over time to monopolies?
(a) Separate them slowly.
(b) Break them up.
(c) Make them obsolete.
(d) Strengthen them.

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

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

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

Short Answer Questions

1. Friedman theorizes that in extreme cases where parents don't pay for schooling, the government could provide a ______.

2. What does Friedman believe needs protection in order for the freedom of the market to arise?

3. According to Friedman, which of the following is the least bad?

4. According to Friedman, what cannot exist without a literate and informed population?

5. Friedman believes that government that has the power to do good, also has the power to do ______.

Short Essay Questions

1. What does Friedman think of the remark, "Ask not what your country can do for you, ask what you can do for your country"?

2. What is Friedman's definition of political freedom? Of economic freedom?

3. According to Friedman what is the role of government?

4. What does Friedman believe to be the cause of the Great Depression?

5. Explain Friedman's voucher proposal.

6. How does Friedman explain government's role in a free society?

7. What reason does Friedman refute for government spending?

8. Does Friedman believe that most societies have been free or not free?

9. What is fiscal policy?

10. Concerning business cycles that Friedman explains, what is one role of government?

(see the answer keys)

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