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

2. One role of government argued by the New Deal was to ______.
(a) Even out economic cycles.
(b) Regulate military spending.
(c) Provide subsidies for the poor.
(d) Eliminate excessive alcohol drinking.

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

4. According to Friedman, it can be argued that private schools ______ class distinctions, and therefore need government intervention.
(a) Diminish.
(b) Exacerbate.
(c) Increase.
(d) Maintain.

5. What is one method that governments have used to alter the distribution of income?
(a) Selling bonds.
(b) Real estate law.
(c) Social welfare.
(d) Income taxation.

Short Answer Questions

1. Which type of education does Friedman not advocate the government paying for?

2. Friedman believes that one governmental action that is justifiable is to set a ______ education level.

3. What is the relationship between capitalism and the fraction of income paid for capital in countries?

4. What is one factor that Friedman believes has reduced inequality?

5. Friedman believes that the goddess of chance is ______.

(see the answer key)

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