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

Multiple Choice Questions

1. What has been more potent for progress than the visible hand for retrogression according to Friedman?
(a) Invisible hand.
(b) Transparent hand.
(c) None of the answers is correct.
(d) Hidden hand.

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

3. What is the major reason Friedman asserts why government intervention has had the opposite of the intended effects?
(a) People in power only seek political gains.
(b) People do not abide by the rules of the government.
(c) People attempt to promote their own interests.
(d) A wealthy few have made the majority of the decisions for the minority.

4. To what previous restrictions on labor does Friedman compare licenses?
(a) Unions and organizations.
(b) Clubs and coalitions.
(c) Guilds and castes.
(d) Fraternities and sororities.

5. What is one disadvantage Friedman describes of programs to alleviate poverty?
(a) Administration.
(b) Funding.
(c) Authorization.
(d) Fraud.

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

7. What is the relationship between capitalism and the fraction of income paid for capital in countries?
(a) Direct.
(b) Inverse.
(c) Perpendicular.
(d) Correlational.

8. According to Friedman, the essence of a competitive market is its ______ character.
(a) Private.
(b) Trustworthy.
(c) Public.
(d) Impersonal.

9. What is one example of a government supported monopoly?
(a) The postal service.
(b) The coal industry.
(c) The auto industry.
(d) The sugar cane industry.

10. At the time of the book's publication, there was a tendency to regard government intervention as ______.
(a) Harmful.
(b) Necessary.
(c) Detrimental.
(d) Desirable.

11. To what does Friedman equate competition?
(a) A perpendicular line.
(b) A Euclidean line.
(c) A parallel line.
(d) The Prime Meridian.

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

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

14. What type of society does Friedman believe is least materialistic?
(a) Socialist.
(b) Collectivist.
(c) Marxist.
(d) Capitalist.

15. Three levels of control are licensing, registration, and ______.
(a) Certification.
(b) Recognition.
(c) Acceptance.
(d) Initiation.

Short Answer Questions

1. What effect has Friedman observed that minimum wage laws have had on poverty?

2. For Friedman, what is one major problem in interpreting the evidence on the distribution of income?

3. What industry does Friedman use to argue against licensure?

4. Which group does Friedman believe to be contradictory in their views on free speech and fair employment laws?

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

(see the answer keys)

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