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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. According to Friedman, what is the Federal Reserve lacking?

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

3. Originally, liberalism fought for freedom of thought, free-markets, free trade, constitutionalism, representative government, and ______.

4. What does Friedman say can government not duplicate?

5. Friedman's belief is that what cause would free trade substantially promote, both domestically and internationally?

Short Essay Questions

1. Does Friedman believe that most societies have been free or not free?

2. How does Friedman argue that floating exchange rates can affect international trade?

3. Explain how international currency rates have changed since 1900.

4. Explain Friedman's voucher proposal.

5. What is the relationship Friedman describes between economic freedom and political freedom?

6. What are Friedman's recommendations in order for stocks to become self-regulating?

7. What is Friedman's definition of political freedom? Of economic freedom?

8. Why does Friedman believe government power should be limited?

9. What is Friedman's recommendation to the Federal Reserve System?

10. What examples does Friedman give of when the Federal Reserve System mismanaged the money supply?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Friedman published "Capitalism and Freedom" in 1962. It is one of Friedman's attempts to spread free-market ideas to the public at large. The book advocates a number of free-market proposals, many of which, such as floating exchange rates and flat taxes, are implemented across the world today and seem commonplace. However, many of his more radical ideas remain controversial, such as school vouchers, or are totally ignored, like ending occupational licensure. In an essay, examine the historical context of Friedman's work and analyze the major movements of the time that may have influenced his views.

Essay Topic 2

Friedman articulates that economic freedom is necessary for political freedom. Analyze the factors necessary for economic freedom to occur and explain where government intervention is appropriate.

Essay Topic 3

After describing the current international trade situation regarding government regulation of exchange rates and the price of gold, Friedman goes on to explain his free market solution. What is Friedman's solution? What are the positives and negatives with it? In your opinion, do you think it would work?

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