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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. One threat Friedman believes to the preservation and expansion of freedom is ______.
(a) Cuba.
(b) Economic uncertainties.
(c) The Kremlin.
(d) An uneducated workforce.

2. Regarding certification, what does Friedman stress increases sales?
(a) Word of mouth advertising.
(b) Certificates of authenticity.
(c) Good products that maintain good reputations.
(d) Stringent certification controls.

3. Friedman believes that the goddess of chance is ______.
(a) Dead.
(b) Skilled.
(c) Blind.
(d) Deaf.

4. What is the term for making non-membership in a union a condition of employment?
(a) "Blue-bee" contract.
(b) Red-cat" contract.
(c) "Yellow-dog" contract.
(d) "Green-bird" contract.

5. Another threat for Friedman to the preservation and expansion of freedom is:
(a) An internal threat of labor unions.
(b) An internal threat of licensure requirements.
(c) An internal threat of government regulation.
(d) An internal threat of unfair political practices.

6. Friedman advocates ______ income of the poor.
(a) Supplementing.
(b) Reducing.
(c) Taxing.
(d) Supplanting.

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

8. What industry sector is most prevalent in monopoly?
(a) Service.
(b) Textile.
(c) Shipping.
(d) Manufacturing.

9. According to Friedman, what is one unknown negative effect of farm subsidies?
(a) Increase in production of cotton.
(b) An emphasis on educational testing.
(c) A removal of three senate seats.
(d) A hindrance to the pursuit of foreign policy.

10. What is the major disadvantage Friedman describes of the proposed negative income tax?
(a) Determining the level of tax.
(b) Political implications.
(c) Determining the level of benefit.
(d) Implementation implications.

11. What term describes the deliberate setting of prices through an agreement by firms?
(a) Monopoly.
(b) Free market.
(c) Labor unions.
(d) Collusion.

12. What example does Friedman give for one argument for registration?
(a) Tobacco registration.
(b) Alcohol registration.
(c) Sex offender registration.
(d) Firearm registration.

13. One argument Friedman theorizes for Social Security is ______.
(a) The economics of incentives argument.
(b) The neighborhood effect.
(c) The lost boys result.
(d) Paternalism.

14. What does the Texas Railroad Commission enforce?
(a) Number of trains on the rails.
(b) Cattle in fields near railway lines.
(c) Transportation of goods by rail.
(d) Output of oil wells.

15. In Chapter 10, The Distribution of Income, what was the chief characteristic of progress and development over the past century?
(a) Advances in technology.
(b) Advances in entertainment.
(c) Advances in education.
(d) Increae in leisure time.

Short Answer Questions

1. Friedman theorizes compulsory purchase of annuities has imposed ______ costs for ______ gains.

2. What is one example Friedman uses to demonstrate his point on monopoly in industry?

3. In what decades did intellectuals in the United States consider capitalism to be defective?

4. What is the major reason Friedman asserts why government intervention has had the opposite of the intended effects?

5. What is one method that governments have used to alter the distribution of income?

(see the answer keys)

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