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

Multiple Choice Questions

1. Who does Friedman believe is most critical of capitalism?
(a) Socialists.
(b) Marxists.
(c) Democrats.
(d) Communists.

2. For Friedman, what is the main argument for licensure?
(a) Maternalism.
(b) Racism.
(c) Paternalism.
(d) Materialism.

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

4. Friedman theorizes compulsory purchase of annuities has imposed ______ costs for ______ gains.
(a) Social, political.
(b) Little, large.
(c) Large, little.
(d) Minimal, moderate.

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

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

7. According to Friedman, what is the goal of government intervention regarding the distribution of income?
(a) Social welfare.
(b) Job creation.
(c) Taxation.
(d) Income equality.

8. Which of the following is not an example of social welfare?
(a) Minimum wage laws.
(b) Medicare.
(c) Occupational licensure.
(d) Public housing.

9. What does OASI stand for?
(a) Optimum and Standard Issuance.
(b) Older and Simpler Issues.
(c) Old Age and Survivor's Insurance.
(d) Occupational Advocacy Standing Issues.

10. Friedman believes that ______ are no argument for nationalizing the provision of annuities.
(a) Wealth redistributions.
(b) Income stabilizations.
(c) Economies of scale.
(d) Opportunity costs.

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

12. Friedman gives examples of successful government intervention except ______.
(a) The income tax.
(b) Sherman antitrust laws.
(c) School system.
(d) Magnificent dams.

13. Where does Friedman live?
(a) Chicago.
(b) New York.
(c) Philadelphia.
(d) San Francisco.

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

15. According to Friedman, a liberal will welcome measures that promote what?
(a) Freedom and equality.
(b) Power and politics.
(c) Wealth and freedom.
(d) Elimination of poverty.

Short Answer Questions

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

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

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

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

5. In Chapter 12, The Alleviation of Poverty, what two things does Friedman say a person cannot be at the same time?

(see the answer keys)

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