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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

2. What example does Friedman use to argue against the redistribution of wealth?
(a) Robinson Crusoe.
(b) Davey Crockett.
(c) The Swiss Family Robinson.
(d) Mark Twain.

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

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

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

Short Answer Questions

1. What is the major disadvantage Friedman describes of the proposed negative income tax?

2. What is the key issue for Friedman with annuities?

3. What is one disadvantage Friedman describes of programs to alleviate poverty?

4. What is one factor that Friedman believes has reduced inequality?

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

Short Essay Questions

1. According to Friedman, is there any justification for government intervention when it comes to distributing wealth?

2. Do you agree or disagree with Friedman's flat tax proposal?

3. Why does Friedman reject "right to work" laws?

4. If people were given cash instead of subsidies like food stamps, how might they would use it to get themselves out of poverty, and how might it be wasted?

5. In Chapter 13, Friedman summarizes his examples. Which do you agree with?

6. What are the three forms of control discussed by Friedman in Chapter 9, Occupational Licensure?

7. What does Friedman believe are the effects of farm price supports?

8. What does Friedman assert that capitalism has done for inequalities?

9. Do you think doctors should be required to obtain a license?

10. Friedman accepts the reasoning that justifies "governmental action to alleviate poverty" (p. 191). What two issues must be addressed in order for this to happen?

(see the answer keys)

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