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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 9, Occupational Licensure.

Multiple Choice Questions

1. Friedman's evidence suggests that for every $100 of government spending, a certain amount is added to income. How much?
(a) $50.
(b) $100.
(c) $300.
(d) $150.

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

3. Friedman's theory is that monetary exchange rates will allow trades across countries to ______ in accord with those rates.
(a) Stagnate.
(b) Equilibrate.
(c) Increase.
(d) Decrease.

4. What does Friedman claim that governments abuse?
(a) The power to determine taxes.
(b) The trust of the people.
(c) Ability to issue stocks.
(d) Commodity standards.

5. Instead of government spending, what does Friedman advocate the government use to stabilize the economy?
(a) Health care.
(b) Unemployment.
(c) Taxes.
(d) Welfare.

Short Answer Questions

1. Which of the following can be justified by Friedman for government interventions?

2. In Friedman's mind, why is centralization attractive to many?

3. Friedman makes the distinction between education and ______.

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

5. What does Friedman believe will become self-regulating?

(see the answer key)

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