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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 9, Occupational Licensure.

Multiple Choice Questions

1. Labor unions are referred to as ______.
(a) Monopoly in government.
(b) Monopoly in labor.
(c) Monopoly in industry.
(d) Produced monopoly.

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

3. What specific social responsibility does Friedman condemn for corporations?
(a) Fair hiring practices.
(b) Charitable giving.
(c) Right to work laws.
(d) Sweat free labor practices.

4. Friedman believes that all of the following are appropriate for fiscal policy except ______.
(a) Fluctuating in spending based on the political climate.
(b) Spending based on community priorities.
(c) Avoiding erratic changes in spending.
(d) Planning for stable tax rates.

5. What does Friedman believe will become self-regulating?
(a) The World Bank.
(b) Monetary stocks.
(c) Exchange rates.
(d) The gold standard.

Short Answer Questions

1. What term describes the deliberate setting of prices through an agreement by firms?

2. According to Friedman, what are licenses restrictions on?

3. To what previous restrictions on labor does Friedman compare licenses?

4. According to Friedman, what is the Federal Reserve lacking?

5. What does Friedman believe coordinates individuals over vast distances and across all belief systems?

(see the answer key)

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