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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. One of Friedman's claims for government involvement in education asserts that there are ______ to education.
(a) Positive externalities.
(b) Extreme costs.
(c) Negative externalities.
(d) Minimal costs.

2. Friedman makes the distinction between education and ______.
(a) Aging.
(b) Instruction.
(c) Schooling.
(d) Income.

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

4. Which type of education does Friedman not advocate the government paying for?
(a) Minimal.
(b) Liberal.
(c) Vocational.
(d) Industrial.

5. 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 colleague effect.
(b) The common principle.
(c) The neighborhood effect.
(d) The future growth principle.

Short Answer Questions

1. Friedman asserts that the Federal Reserve created the major contractions of the following years except______.

2. Friedman states that the problem with teacher salaries is not that they are too low, but that they are ______.

3. For Friedman, what is one major problem in interpreting the evidence on the distribution of income?

4. What does Friedman believe is an appropriate rate of increase for the Federal Reserve?

5. Friedman theorizes that in extreme cases where parents don't pay for schooling, the government could provide a ______.

(see the answer key)

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