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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 is the goal of government intervention regarding the distribution of income?
(a) Social welfare.
(b) Taxation.
(c) Income equality.
(d) Job creation.

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

3. Which of the following does Friedman dispute?
(a) Government should stay out of individual economic choices.
(b) A free market economic system works.
(c) The gold standard for backing money is good.
(d) The Central Bank holds too much power.

4. What does Friedman believe is one drawback of the Federal Reserve having so much power?
(a) When the Federal Reserve makes mistakes, the whole country suffers.
(b) The Federal Reserve has rules that are too strict to follow in order to make any real change.
(c) The Federal Reserve chairperson is elected and therefore subject to the whims of the public.
(d) When the Federal Reserve does well, only a few profit.

5. What caused all the major nations to abandon the gold standard?
(a) World War II.
(b) Decline in the value of gold.
(c) World War I.
(d) The Great Depression.

Short Answer Questions

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

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

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

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

5. One of Friedman's claims for government involvement in education asserts that there are ______ to education.

(see the answer key)

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