Capitalism and Freedom Test | Final Test - Easy

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

Multiple Choice Questions

1. What is one example Friedman uses to demonstrate his point on monopoly in industry?
(a) Steel vs. shipping industry.
(b) Automobile vs. wholesale industry.
(c) Entertainment vs. telecommunication industry.
(d) Textile vs. production industry.

2. What has been more potent for progress than the visible hand for retrogression according to Friedman?
(a) Invisible hand.
(b) None of the answers is correct.
(c) Hidden hand.
(d) Transparent hand.

3. What does OASI stand for?
(a) Older and Simpler Issues.
(b) Optimum and Standard Issuance.
(c) Old Age and Survivor's Insurance.
(d) Occupational Advocacy Standing Issues.

4. In 1961, how much did the government spend on direct welfare payments and programs?
(a) $45 million.
(b) $33 billion.
(c) $42 billion.
(d) $30 million.

5. What does Friedman advocate the abolition of in Chapter 10, The Distribution of Income?
(a) Corporate income tax.
(b) Welfare.
(c) Trade unions.
(d) Flat-rate income tax.

6. Instead of reducing inequality, Friedman states the income tax has favored ______.
(a) The growth of labor unions.
(b) The growth of large corporations.
(c) Subsidies for farmers.
(d) Public housing.

7. What prefix were New Dealers commonly called?
(a) Un.
(b) Ex.
(c) Re.
(d) Ill.

8. Friedman gives examples of successful government intervention except ______.
(a) School system.
(b) Sherman antitrust laws.
(c) The income tax.
(d) Magnificent dams.

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

10. Friedman believes that the goddess of chance is ______.
(a) Blind.
(b) Skilled.
(c) Deaf.
(d) Dead.

11. Friedman would agree that racism is ______.
(a) Curable.
(b) Expensive.
(c) Unavoidable.
(d) Fixable with government intervention.

12. At the time of the book's publication, there was a tendency to regard government intervention as ______.
(a) Necessary.
(b) Detrimental.
(c) Harmful.
(d) Desirable.

13. What term describes the deliberate setting of prices through an agreement by firms?
(a) Labor unions.
(b) Free market.
(c) Monopoly.
(d) Collusion.

14. To what does Friedman equate competition?
(a) A Euclidean line.
(b) The Prime Meridian.
(c) A parallel line.
(d) A perpendicular line.

15. What is the term for laws that forbid membership in a union a requirement for employment?
(a) Employment standards laws.
(b) Right to work laws.
(c) Anti-union laws.
(d) Fair labor laws.

Short Answer Questions

1. Forming a list of who engages in what is known as ______.

2. Friedman suggests that employees may prefer to have part of their remuneration take the form of amenities such as what?

3. What industry does Friedman use to explain his views on monopoly in labor?

4. What is the major disadvantage Friedman describes of the proposed negative income tax?

5. Three levels of control are licensing, registration, and ______.

(see the answer keys)

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