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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 10, The Distribution of Income.

Multiple Choice Questions

1. What does Friedman believe is one drawback of the Federal Reserve having so much power?
(a) The Federal Reserve has rules that are too strict to follow in order to make any real change.
(b) When the Federal Reserve makes mistakes, the whole country suffers.
(c) When the Federal Reserve does well, only a few profit.
(d) The Federal Reserve chairperson is elected and therefore subject to the whims of the public.

2. Which of the following does Friedman dispute?
(a) The Central Bank holds too much power.
(b) The gold standard for backing money is good.
(c) Government should stay out of individual economic choices.
(d) A free market economic system works.

3. Friedman believes that the goddess of chance is ______.
(a) Dead.
(b) Skilled.
(c) Deaf.
(d) Blind.

4. What does Friedman claim that governments abuse?
(a) Commodity standards.
(b) The power to determine taxes.
(c) Ability to issue stocks.
(d) The trust of the people.

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

Short Answer Questions

1. What caused all the major nations to abandon the gold standard?

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

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

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

5. What does Friedman advocate the abolition of in Chapter 10, The Distribution of Income?

(see the answer key)

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