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

Multiple Choice Questions

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

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

3. What does Friedman believe makes registration easier?
(a) Elections.
(b) Taxation.
(c) Representation.
(d) Recognition.

4. How many problems with monopolies does Friedman describe?
(a) Four.
(b) One.
(c) Three.
(d) Two.

5. Friedman hypothesizes that there has been a change in discrimination along with the rise of capitalism because ______.
(a) There has been an increase in the population of skilled workers.
(b) Religion has argued equality on moral grounds.
(c) Contract arrangements replaced status as a source of wealth.
(d) Greed has overtaken all ethical values.

6. Who does Friedman believe maintains the system of licensure?
(a) Local unions.
(b) Licensed members of each field.
(c) Federal government.
(d) Licensure review board.

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

8. What problem did Dicey write about in 1914?
(a) Education for all.
(b) Old age pensions.
(c) Veteran's health benefits.
(d) Prenatal and infant care.

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

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

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

12. Who said, "There is much ruin in a nation"?
(a) Adam Smith.
(b) Milton Friedman.
(c) John Maynard Keynes.
(d) Carl Menger.

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

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

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

Short Answer Questions

1. What was the exemption of the federal income tax when Friedman wrote "Capitalism and Freedom"?

2. What prefix were New Dealers commonly called?

3. In Chapter 10, The Distribution of Income, what was the chief characteristic of progress and development over the past century?

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

5. Which of the following is not an example of social welfare?

(see the answer keys)

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