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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 5, Fiscal Policy.

Multiple Choice Questions

1. For Friedman, where is the best place for power to be held?
(a) In the states.
(b) At the federal level.
(c) In the local community.
(d) In the economic system.

2. Friedman believes that economic control can lead to infringements on ______.
(a) Licensing requirements.
(b) International trade.
(c) Liberties.
(d) Social welfare.

3. The thought that the best use of government spending would be on useless projects is known as ______.
(a) "Evening it out."
(b) "Steaming the water."
(c) "Emptying the pot."
(d) "Filling holes."

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

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

Short Answer Questions

1. What does Friedman assert is an example of an appropriate task for government?

2. What is the term for currency not being traded for any amount of another currency?

3. Friedman hypothesizes that the change from free market societies to economic controlled ones led classical liberals to worry that it would ______ political freedom.

4. What does Friedman use as an example of a use of government where individuals cannot consume individual amounts?

5. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.

(see the answer key)

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