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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. Besides enforcing contracts, what one other thing does Friedman say government should do?
(a) Regulate commerce.
(b) Protect against external threats.
(c) Secure a country's borders.
(d) Provide for public transportation.

2. What does Friedman believe is one drawback of the Federal Reserve having so much power?
(a) When the Federal Reserve does well, only a few profit.
(b) The Federal Reserve chairperson is elected and therefore subject to the whims of the public.
(c) When the Federal Reserve makes mistakes, the whole country suffers.
(d) The Federal Reserve has rules that are too strict to follow in order to make any real change.

3. What is the basic problem of social life for Friedman?
(a) How to distribute wealth equitably.
(b) How to provide for entertainment opportunities.
(c) How to coordinate the economic activities of large numbers of individuals.
(d) How to tax and provide responsively for the people.

4. Friedman believes that free markets are not sufficient for political freedom since many countries demonstrate the possibility of ______.
(a) Economic freedom.
(b) Dictatorial government.
(c) Laissez-faire markets.
(d) Authoritarian capitalism.

5. According to Friedman, the market enables wide diversity, meaning power can be located in ______.
(a) Large pockets with limited interests.
(b) The hands of many.
(c) The hands of a few.
(d) Small pockets of individual actors.

Short Answer Questions

1. For Friedman, what is an all-embracing ethic?

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

3. Which of the following cannot be justified by Friedman for government interventions?

4. A major point for Friedman is that politics and economics are not ______.

5. One role of government argued by the New Deal was to ______.

(see the answer key)

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