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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 10, The Distribution of Income.

Multiple Choice Questions

1. According to Friedman, what cannot exist without a literate and informed population?
(a) A progressive political system.
(b) Democratic societies.
(c) A well-armed militia.
(d) First world countries.

2. What term refers to the circumstance under which the action of one individual imposes significant costs on other individuals for which it is not feasible to make him compensate them?
(a) The common principle.
(b) The neighborhood effect.
(c) The colleague effect.
(d) The future growth principle.

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

4. What is the relationship between capitalism and the fraction of income paid for capital in countries?
(a) Perpendicular.
(b) Correlational.
(c) Direct.
(d) Inverse.

5. According to Friedman, what is the Federal Reserve lacking?
(a) A Magna Carta of sorts.
(b) A Rosetta Stone of sorts.
(c) A Constitution of sorts.
(d) A Declaration of Independence of sorts.

Short Answer Questions

1. What does Friedman advocate the abolition of in Chapter 10, The Distribution of Income?

2. According to Friedman, it can be argued that private schools ______ class distinctions, and therefore need government intervention.

3. Friedman claims there is no connection between equal treatment and what?

4. What does Friedman claim that governments abuse?

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

(see the answer key)

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