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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 4, International and Financial Trade Arrangements.

Multiple Choice Questions

1. For Friedman, what is something that when privately owned can be used if the price is right?
(a) Taxes.
(b) Media.
(c) Educational systems.
(d) Political campaigns.

2. What is the name of the system with the purpose of regulating monetary policy between leading countries?
(a) The Bretton Woods System.
(b) The World Bank System.
(c) The International Monetary System.
(d) The Gold Standard System.

3. Who does Friedman think should set exchange rates?
(a) The International Monetary Fund.
(b) The White House.
(c) No one, they should be allowed to fluctuate on their own.
(d) The Federal Reserve.

4. How are decisions, for Friedman, made where unanimity is a costly way of making decisions?
(a) Decisions by committee.
(b) A system of checks and balances.
(c) Executive decision.
(d) Majority rule.

5. A major point for Friedman is that politics and economics are not ______.
(a) Together.
(b) Autonomous.
(c) Separate.
(d) United.

Short Answer Questions

1. What does Friedman believe is one drawback of the Federal Reserve having so much power?

2. According to Friedman, whom does free trade benefit?

3. What does Friedman believe will markets do over time to monopolies?

4. One question Friedman asks is how we can stop government from destroying ______.

5. What is one example of a negative externality?

(see the answer key)

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