1.2 Economic Systems

Multiple Choice

Which of the following is NOT one of the three basic economic questions every society must answer?

• What goods and services should be produced?

• How should these goods and services be produced?

• Who consumes these goods and services?

• How much money should each person earn?

Multiple Choice

Which of the following is NOT a type of economic system listed?

• Traditional Economy

• Command Economy

• Free Market Economy

• Barter Economy

Multiple Select

In a traditional economy, economic questions are answered by _______.

• customs
• habits

• money

• governments

Multiple Select

Which of the following are advantages of a traditional economy?

• Basic economic questions answered by individuals/communities

• Typically revolves around the family unit

• Little room for innovation or change

• Agricultural and hunting practices usually are the focus

Multiple Choice

In a command (centrally-planned) economy, who owns all the resources and answers the three economic questions?

• Private individuals

• The government

• Religious leaders

• Foreign investors

Multiple Choice

Which of the following is a disadvantage of a command (centrally-planned) economy?

• Low unemployment

• No incentive to work harder

• Great job security

• Less income inequality

Fill in the Blanks

In a free market economy, economic questions are answered by

buyers and sellers.

Open Ended

List two advantages and two disadvantages of a free market economy.

Fill in the Blanks

Specialization leads to efficiency because people

on one task to maximize resources.

Multiple Choice

According to Adam Smith, what is the motivating factor in a free market that pushes people to act?

• Self interest

• Government regulation

• Charity

• Tradition

Open Ended

How do self-interest and competition work together to regulate the marketplace, according to the concept of the 'invisible hand'?

Multiple Select

Which of the following are effects of competition among firms in a market?

• Lower prices

• Higher quality

• Greater efficiency

• Increased government involvement

Fill in the Blanks

A system with free markets but also some government intervention is called a

economy.

Open Ended

What are some reasons governments get involved in mixed economies?

Multiple Choice

Who is considered the 'father of modern capitalism' and what major work did he write?

• Adam Smith - The Wealth of Nations

• Karl Marx - The Communist Manifesto

• Robert Owen - Utopian Socialism

• John Maynard Keynes - The General Theory

Multiple Choice

Which of the following best describes the foundation of the United States economic system?

• Free market values and free enterprise system

• Government ownership of all businesses

• Centralized economic planning

• No government involvement in the economy

Multiple Select

Identify three features of the American Free Market Economy as described in the slides.

• Economic Freedom

• Government ownership of property

• Competition

• Private Property

Fill in the Blanks

Individuals in a free market economy are motivated by

, which drives them to make money.

Open Ended

How does the American government participate in the economy according to the slides?

Open Ended

What is one key difference between major economic systems discussed in this lesson?