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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 13, Conclusion.

Multiple Choice Questions

1. What term refers to the Federal Reserve's ability to produce more money than is deposited?
(a) Fractional reserve banking.
(b) Overdraft protection.
(c) Reserve ability production.
(d) Percent fulfillment banking.

2. What industry does Friedman use to explain his views on monopoly in labor?
(a) Auto.
(b) Coal.
(c) Steel.
(d) Manufacturing.

3. For Friedman, what is one major problem in interpreting the evidence on the distribution of income?
(a) Lack of data.
(b) Reliable empirical evidence.
(c) Temporary vs. long run income status.
(d) Defining poverty levels.

4. What is the basic problem of social life for Friedman?
(a) How to tax and provide responsively for the people.
(b) How to provide for entertainment opportunities.
(c) How to coordinate the economic activities of large numbers of individuals.
(d) How to distribute wealth equitably.

5. Where does Friedman live?
(a) Philadelphia.
(b) New York.
(c) San Francisco.
(d) Chicago.

Short Answer Questions

1. One role of government argued by the New Deal was to ______.

2. Which type of monopoly does Friedman believe is least bad?

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

4. Which term refers to the government stimulating spending?

5. Friedman uses the example of selling ______ to demonstrate a true global economy.

(see the answer key)

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