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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 11, Social Welfare Measures.

Multiple Choice Questions

1. What is the basic problem of social life for Friedman?
(a) How to provide for entertainment opportunities.
(b) How to coordinate the economic activities of large numbers of individuals.
(c) How to tax and provide responsively for the people.
(d) How to distribute wealth equitably.

2. For Friedman, what is an all-embracing ethic?
(a) Religion.
(b) Freedom.
(c) Government.
(d) Education.

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

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

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

Short Answer Questions

1. A major point for Friedman is that politics and economics are not ______.

2. Friedman states that ______ is a generator of inequality.

3. What industry does Friedman use to explain his views on monopoly in labor?

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

5. What caused all the major nations to abandon the gold standard?

(see the answer key)

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