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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What major event does Friedman strongly believe was a result of the government mishandling the money supply?
(a) None of the answers is correct.
(b) The Great Depression.
(c) World War I.
(d) Prohibition.

2. According to Friedman, what is one problem with government stimulus during a recession?
(a) More often than not, inflation skyrockets.
(b) The attempts often have a negative effect.
(c) The measures do not take effect until after the recession.
(d) The stimulus is generally too small to jump-start the economy.

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

4. Friedman makes the distinction between education and ______.
(a) Aging.
(b) Income.
(c) Instruction.
(d) Schooling.

5. The original balancing thought is based on whose economic philosophy?
(a) Krugman.
(b) Keynes.
(c) Smith.
(d) Marx.

6. One question Friedman asks is how we can stop government from destroying ______.
(a) Taxes.
(b) Citizens.
(c) Entertainment.
(d) Freedom.

7. According to Friedman, what conflicts with one another for men?
(a) Religious beliefs.
(b) Absolute freedom.
(c) Political ideology.
(d) Economic interests.

8. Friedman states that government should be ______.
(a) Destroyed.
(b) Limited.
(c) Expanded.
(d) Held accountable.

9. What does Friedman prefer when it comes to exchange rates?
(a) Rising exchange rates?
(b) Floating exchange rates.
(c) Sinking exchange rates.
(d) Hovering exchange rates.

10. Friedman asserts that current liberalism is tied to the state management of ______.
(a) Social welfare.
(b) The economy.
(c) The electoral vote.
(d) The educational system.

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

12. Friedman asserts that government is needed for the ______.
(a) "Rules of the game."
(b) "Rules of the system."
(c) "Rules of the citizens."
(d) "Rules of the road."

13. One solution Friedman proposes is to give parents ______ for schooling.
(a) Coupons.
(b) Tokens.
(c) Credits.
(d) Vouchers.

14. In Friedman's analysis, what century is the historical exception to most men living in tyranny, servitude, and misery?
(a) 20th.
(b) 18th.
(c) 19th.
(d) 17th.

15. According to Friedman, what is lost when foreign exchange is controlled by the government?
(a) Educational freedom.
(b) Political freedom.
(c) Religious freedom.
(d) Economic freedom.

Short Answer Questions

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

2. Friedman believes that government that has the power to do good, also has the power to do ______.

3. Who does Friedman state rejects the view that the government is the patron or master of the citizenry?

4. Friedman states that the problem with teacher salaries is not that they are too low, but that they are ______.

5. The thought that the best use of government spending would be on useless projects is known as ______.

(see the answer keys)

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