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

2. What is one factor that Friedman believes has reduced inequality?
(a) Educational opportunities.
(b) Government intervention.
(c) Civil Rights laws.
(d) Advances in technology.

3. If forced to choose between segregation or integration, which would Friedman choose?
(a) Neither.
(b) A combination.
(c) Segregation.
(d) Integration.

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

5. Friedman gives the following examples of the negative effects of government intervention except ______.
(a) Farm subsidies.
(b) Regulation of the railroads.
(c) Religious freedom acts.
(d) Housing programs.

Short Answer Questions

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

2. Instead of reducing inequality, Friedman states the income tax has favored ______.

3. What industry sector is most prevalent in monopoly?

4. Friedman advocates ______ income of the poor.

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

Short Essay Questions

1. What is occupational licensure?

2. What is the problem for Friedman with fair employment commission legislation?

3. What is Friedman's recommendation regarding an income tax?

4. According to Friedman, do monopolies have any sort of "social responsibility"?

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

6. What are two problems with monopolies for the liberal?

7. In Chapter 13, Friedman summarizes his examples. Which do you disagree with?

8. Do you think people should be forced to participate in social security?

9. What recommendations would Friedman give to a president about an economic downturn?

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

(see the answer keys)

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