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

Multiple Choice Questions

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

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

3. Instead of reducing inequality, Friedman states the income tax has favored ______.
(a) Public housing.
(b) The growth of large corporations.
(c) The growth of labor unions.
(d) Subsidies for farmers.

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

5. What is one argument Friedman gives for public housing?
(a) The law of demand effect.
(b) The paternalism effect.
(c) The neighborhood effect.
(d) The law of supply effect.

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

7. Who does Friedman think can abuse licensure?
(a) Special interest groups.
(b) Those applying for the licenses.
(c) Educational institutions.
(d) An elite few in power.

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

9. Friedman states that ______ is a generator of inequality.
(a) Social security.
(b) Taxation.
(c) Redistribution.
(d) Unemployment.

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

11. According to Friedman, Social security measures were enacted to make receipt of assistance a matter of ______.
(a) Authority.
(b) Paperwork.
(c) Right.
(d) Principle.

12. What does FEPC stand for?
(a) Future Exercises for Preventing Catastrophes.
(b) Finding Education and People Cooperatively.
(c) Fixing Economic Policy for Capitalism.
(d) Fair Employment Practice Commission.

13. What example does Friedman use to demonstrate his views on employment practices?
(a) A lawyer.
(b) A baker.
(c) A grocer.
(d) A blacksmith.

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

15. 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.

Short Answer Questions

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

2. What does OASI stand for?

3. What is the term for laws that forbid membership in a union a requirement for employment?

4. Who said, "There is much ruin in a nation"?

5. Friedman claims there is no connection between equal treatment and what?

(see the answer keys)

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