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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. Who does Friedman think should set exchange rates?

2. One argument for government spending that Friedman refutes is that it will reduce what?

3. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?

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

5. What does Friedman believe coordinates individuals over vast distances and across all belief systems?

Short Essay Questions

1. Explain how international currency rates have changed since 1900.

2. Friedman explains that the economic activities of large numbers of individuals can be coordinated. In what two ways?

3. What is fiscal policy?

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

5. What is the modern day definition of liberalism?

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

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. Where does Friedman believe power in government should be located?

9. What is the relationship Friedman describes between economic freedom and political freedom?

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

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

What is the balance wheel theory of intervention? What is Friedman's view on it?

Essay Topic 3

Friedman argues that government mishandling of the money supply produced the Great Depression. Examine Friedman's analysis of the Great Depression and determine if the Federal Reserve System caused the Great Depression.

(see the answer keys)

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