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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. Friedman's belief is that what cause would free trade substantially promote, both domestically and internationally?

2. Friedman states that government should be ______.

3. In Chapter 3, what does Friedman provide a history of?

4. In Friedman's opinion, what will check government power?

5. In the market described by Friedman, exchanges between households are ______.

Short Essay Questions

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

2. What is the modern day definition of liberalism?

3. What is Friedman's recommendation to the Federal Reserve System?

4. Explain Friedman's voucher proposal.

5. What is the balance wheel theory?

6. According to Friedman, what is the difference between schooling and education? What does the government do?

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

8. What is meant when Friedman states "Government as rule-maker and umpire"?

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

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

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

After describing the current international trade situation regarding government regulation of exchange rates and the price of gold, Friedman goes on to explain his free market solution. What is Friedman's solution? What are the positives and negatives with it? In your opinion, do you think it would work?

Essay Topic 2

Friedman advocates for the end of the progressive income tax in favor of a flat tax. Why is he against the progressive income tax? What are the benefits to a flat tax? In an essay, analyze Friedman's claims on the progressive income tax.

Essay Topic 3

Friedman describes the current international trade arrangements of his time. In Friedman's day, the value of currency was tied to the gold standard. This arrangement was known as the Bretton Woods system. Analyze this currency system. What is it? How did it work? What were the advantages and disadvantages of it? How does it compare with what we have in the present day?

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