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

2. What does Friedman advocate the abolition of in Chapter 10, The Distribution of Income?
(a) Trade unions.
(b) Flat-rate income tax.
(c) Welfare.
(d) Corporate income tax.

3. According to Friedman, whom does free trade benefit?
(a) The wealthier trading country.
(b) Neither trading country.
(c) The poorer trading country.
(d) Both trading countries.

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

5. What does Friedman believe is an appropriate rate of increase for the Federal Reserve?
(a) 3%-5%.
(b) 1%-3%.
(c) 5%-7%.
(d) None. That is not a goal of the Federal Reserve.

Short Answer Questions

1. For Friedman, what is something that when privately owned can be used if the price is right?

2. What does OASI stand for?

3. For Friedman, what is an all-embracing ethic?

4. One role of government argued by the New Deal was to ______.

5. What specific social responsibility does Friedman condemn for corporations?

(see the answer key)

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