Economic Systems

Front

Which of the following is NOT one of the three basic questions of economics when looking at economic systems? What goods and services will be produced? What is the price of the goods? Who is responsible for producing goods and services? How will goods and services be distributed to customers?

Back

What is the price of the goods?

Answer explanation

The question of 'What is the price of the goods?' is not one of the three basic economic questions. The basic questions focus on production, distribution, and what to produce, rather than pricing.

Front

An economic system heavily influenced by habits, customs, past practice, and/or beliefs.

Back

Traditional

Answer explanation

A traditional economic system is characterized by its reliance on customs and beliefs, making it heavily influenced by historical practices. This distinguishes it from command, free market, and mixed systems, which operate differently.

Front

The government directly influences and controls business practices because it owns natural and capital resources.

Back

Command/Centrally Planned

Answer explanation

The statement describes a system where the government controls business practices by owning resources, which is characteristic of a Command/Centrally Planned economy. In such economies, the government makes all economic decisions.

Front

Privately owned factors of production (Households own ALL land, labor, capital)

Back

Free Market

Answer explanation

In a Free Market economy, all factors of production, including land, labor, and capital, are privately owned by households. This distinguishes it from Traditional, Command, and Mixed economies, where ownership structures differ.

Front

An economic system that combines elements of all other systems

Back

Mixed

Answer explanation

A mixed economic system incorporates elements from traditional, command, and free market systems, allowing for a balance between government intervention and individual entrepreneurship.

Front

Roles of individuals are static/unchanging from generation to generation. Options: Traditional, Command/Centrally Planned, Free Market, Mixed

Back

Traditional

Answer explanation

In traditional economies, roles are often based on customs and passed down through generations, leading to static and unchanging roles. This contrasts with other economic systems where roles can evolve and change.

Front

No government involvement/regulation of business transactions

Back

Free Market

Answer explanation

A Free Market system is characterized by minimal government involvement in business transactions, allowing supply and demand to dictate prices and production. This aligns with the question's description.

Front

Considered synonymous with communist or socialist policy

Back

Command/Centrally Planned

Answer explanation

The term 'Command/Centrally Planned' refers to an economic system where the government makes all decisions regarding production and distribution, aligning closely with communist or socialist policies.

Front

Tries to balance the control of a command economy with the freedom of the free market.

Back

Mixed

Answer explanation

A mixed economy combines elements of both command and free market systems, allowing for government control in certain areas while promoting market freedom, thus balancing the two approaches.

Front

Individual freedom is suppressed, roles are determined by state planners/government.

Back

Command/Centrally Planned

Answer explanation

In a Command/Centrally Planned economy, the government controls all aspects of production and distribution, suppressing individual freedom and determining roles, which aligns with the statement provided.