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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. Printing new money to increase the quantity of money is:
(a) good for stability
(b) the only way most governments can survive
(c) good economic policy
(d) highly inflationary

2. As a result of inflation:
(a) consumers feel richer
(b) one dollar buys fewer goods and services
(c) consumers buy more goods and services
(d) one dollar buys more goods and services

3. Most Western nations have experienced:
(a) decrease in the growth of government
(b) no change in the size of national government
(c) laws limited the growth of government
(d) growth of national government

4. At the time the book was written, how many workers belonged to unions?
(a) one in four
(b) one in two
(c) one in three
(d) one in five

5. In Western nations, when a government doesn't achieve its economic goals:
(a) they keep trying
(b) nothing happens
(c) there is usually a change of regimes
(d) the situation continues

Short Answer Questions

1. Objections to the school voucher plan include all but the following:

2. The minimum wage causes:

3. In what ways does competition protect the consumer?

4. Friedman favors:

5. During a hyperinflation:

Short Essay Questions

1. What can function as money?

2. Do all workers benefit from unions?

3. What is inflation?

4. In what ways is the American Medical Association a labor union?

5. What are the two big issues faced in new drug approval?

6. What is the purpose of the Environmental Protection Agency?

7. According to Friedman, what policy would promote economic stability?

8. What is the big advantage of the school voucher programs?

9. What is the purpose of a labor union?

10. What is the purpose given for regulation of industry?

(see the answer keys)

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