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

Multiple Choice Questions

1. 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) A wealthy few have made the majority of the decisions for the minority.
(c) People do not abide by the rules of the government.
(d) People attempt to promote their own interests.

2. 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.

3. What has been more potent for progress than the visible hand for retrogression according to Friedman?
(a) Invisible hand.
(b) None of the answers is correct.
(c) Transparent hand.
(d) Hidden hand.

4. What does OASI stand for?
(a) Old Age and Survivor's Insurance.
(b) Older and Simpler Issues.
(c) Occupational Advocacy Standing Issues.
(d) Optimum and Standard Issuance.

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

6. What has capitalism done for discrimination according to Friedman?
(a) Reduced it.
(b) Abolished it.
(c) Increased it.
(d) Widened.

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

8. Friedman suggests that employees may prefer to have part of their remuneration take the form of amenities such as what?
(a) Libraries.
(b) Housing allowance.
(c) Parking spaces.
(d) Baseball fields.

9. One recourse recommended by Friedman for poverty is ______.
(a) Minimum wages.
(b) More education for the poor.
(c) Private charity.
(d) Government assistance.

10. One threat Friedman believes to the preservation and expansion of freedom is ______.
(a) Cuba.
(b) The Kremlin.
(c) An uneducated workforce.
(d) Economic uncertainties.

11. What term describes the deliberate setting of prices through an agreement by firms?
(a) Labor unions.
(b) Collusion.
(c) Free market.
(d) Monopoly.

12. Regarding certification, what does Friedman stress increases sales?
(a) Stringent certification controls.
(b) Good products that maintain good reputations.
(c) Certificates of authenticity.
(d) Word of mouth advertising.

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

14. Friedman would agree that racism is ______.
(a) Expensive.
(b) Fixable with government intervention.
(c) Unavoidable.
(d) Curable.

15. According to Friedman, a liberal will welcome measures that promote what?
(a) Elimination of poverty.
(b) Freedom and equality.
(c) Power and politics.
(d) Wealth and freedom.

Short Answer Questions

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

2. What industry sector is most prevalent in monopoly?

3. In what decades did intellectuals in the United States consider capitalism to be defective?

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

5. What specific social responsibility does Friedman condemn for corporations?

(see the answer keys)

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