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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 3, The Control of Money.

Multiple Choice Questions

1. Friedman defines a country as a collection of ______.
(a) Leaders.
(b) Individuals.
(c) Ideals.
(d) Citizens.

2. What term refers to the Federal Reserve's ability to produce more money than is deposited?
(a) Overdraft protection.
(b) Fractional reserve banking.
(c) Percent fulfillment banking.
(d) Reserve ability production.

3. Past and current definitions of liberalism are the same with respect to ______.
(a) Distribution of wealth and the welfare state.
(b) Paternalism and individualism.
(c) Free markets and the rule of law.
(d) Civil freedoms and democracy.

4. Which of the following can be justified by Friedman for government interventions?
(a) Property rights.
(b) Subsidizing farm production.
(c) The draft.
(d) Minimum wage.

5. What is one example of a negative externality?
(a) Private education.
(b) Lack of voting.
(c) Pollution.
(d) Welfare.

Short Answer Questions

1. Friedman states that government should be ______.

2. Originally, liberalism fought for freedom of thought, free-markets, free trade, constitutionalism, representative government, and ______.

3. In Friedman's opinion, what should individuals be allowed to do?

4. For Friedman, what is something that when privately owned can be used if the price is right?

5. Friedman believes that free markets are not sufficient for political freedom since many countries demonstrate the possibility of ______.

(see the answer key)

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