Unit 2 Notes Economic Systems

Multiple Choice

Which of the following is a weakness of a traditional economy?

• Discourages new ideas

• Lack incentives

• Some people get left out

• Does not meet the needs of consumers

Multiple Choice

What is one significant advantage of a market economic system compared to traditional and command systems?

• It discourages new ideas

• It produces a great variety of goods

• It lowers living standards

• It lacks incentives

Multiple Choice

Which economic system is characterized by the allocation of resources based on ritual, habit, or custom?

• Traditional

• Command

• Market

• Mixed

Multiple Choice

List three major economic and social goals of the U.S. economy.

• Economic growth, reduced unemployment, price stability
• Higher interest rates, increased poverty, reduced investment
• Increased taxes, higher inflation, reduced savings
• Expanded government control, decreased trade, lower wages

Multiple Choice

What is one possible trade-off to full employment as described in the example of foreign policy?

• Higher unemployment rates.
• Decreased Economic freedom

• Stronger international relations.
• Increased inflation.

Multiple Select

Which of the following are characteristics of free enterprise and capitalism? (all that apply)

• Economic Freedom

• Competition

• Private Property Rights

• Central Planning

Multiple Choice

What is the role of the entrepreneur in a capitalist economy and provide an example.

• Entrepreneurs only work in the public sector to create government-funded projects.
• Entrepreneurs primarily focus on managing existing businesses rather than creating new ones.
• Entrepreneurs manage land, capital, and labor in order to seek the reward called profit.

• Entrepreneurs are responsible for regulating the economy and setting prices for goods.

Multiple Choice

Does our economy allow economic freedom?

• Yes people are free to start the business they want.

• No only the government runs business

Multiple Choice

Reflecting on what you learned about economic systems, which type of economy do you think best meets the needs of its people, and why?

• Market

• Command

• Traditional