Inside Report (2)

A recent report that economist Milton Friedman was undergoing an FBI security check led to speculation that he was to succeed Paul Volcker, Federal Reserve Board chairman.

Friedman, however, says the security check was to clear him for membership on President Reagan's Economic Advisory Board. He says he likes California very much and has turned down many opportunities to be a resident of Washington.

"I do not have any expectations," be said when asked at a breakfast meeting with reporters about the Fed post. But he refused to completely deny any interest in the job, calling it an "iffy" question.m