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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 12, The Alleviation of Poverty, what two things does Friedman say a person cannot be at the same time?
(a) Naturalist and soldier.
(b) Egalitarian and liberal.
(c) Democrat and republican.
(d) Progressive and conservative.

2. According to Friedman, what is one unknown negative effect of farm subsidies?
(a) A removal of three senate seats.
(b) A hindrance to the pursuit of foreign policy.
(c) Increase in production of cotton.
(d) An emphasis on educational testing.

3. Friedman believes that ______ are no argument for nationalizing the provision of annuities.
(a) Opportunity costs.
(b) Wealth redistributions.
(c) Income stabilizations.
(d) Economies of scale.

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

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

Short Answer Questions

1. For Friedman, what is the main argument for licensure?

2. What is one example Friedman uses to demonstrate his point on monopoly in industry?

3. Labor unions are referred to as ______.

4. What industry does Friedman use to argue against licensure?

5. According to Friedman, what is the goal of government intervention regarding the distribution of income?

Short Essay Questions

1. What is occupational licensure?

2. Why is Friedman against fair employment laws?

3. What are the three sources of monopoly?

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

5. According to Friedman, can a liberal be an egalitarian?

6. What example does Friedman use to illustrate his point about direct cash payments to those below a certain income level?

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

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

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

10. What does Friedman say about public housing as a form of social welfare?

(see the answer keys)

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