African Economic Systems

Which describes how MOST countries around the world answer basic economic questions?

• A mixture of command market economies.
• Most countries are pure market economies.
• Most countries are pure command economies.
• A mixture of traditional and market economies.

South African economic policy is conservative focusing on controlling inflation, maintaining a budget surplus, and using state-owned enterprises to deliver basic services to low-income areas as a means to increase job growth and household income. However companies are free to choose what to produce, how to produce, and for whom to produce. Where does this policy place South Africa on a continuum between pure market and pure command?

• Almost pure traditional
• Pure market
• More market than command
• Pure Command

If Nigeria passed a law that taxed all imports from Kenya, this would be known as

• a tariff
• an embargo
• a quota
• an entrepreneur

Under which economic system does the government make almost all of the economic decisions?

• Command
• Market
• Traditional
• Capitalist

Which statement would a researcher use to prove South Africa is more related to a market economy than a command economy?

• Much of South Africa's GDP comes from private industries that freely compete in the world market
• Due to the effects of Apartheid, the government in South Africa runs many social programs
• Education and healthcare are primarily dominated by the government in South Africa
• Businesses are legally required to pay taxes to the government in South Africa

Nigeria has large deposits of oil and is currently exporting a significant quantity of oil. However, Nigeria has very few industries outside of oil and no other significant natural resources. How does this impact Nigeria's GDP?

• Makes the GDP more dependence on agriculture.
• Makes the GDP more dependent on oil production.
• Makes the GDP inaccurate because there is little industry.
• Makes the GDP inaccurate because there is only one major natural resource in the country.

Most African nations depend on foreign trade with many nations to provide things which are not made in their country. Which of these makes foreign trade with many nations easier?

• Use of a world-wide currency.
• A system to exchange currency between countries.
• Trading only with countries that have the same currency.
• Trade of products made in their country for needed goods so currency is not needed.

In South Africa it is easy to start a business. In addition, private property rights are well protected. What impact does this have on the role of entrepreneurs in South Africa?

• Entrepreneurs are not affected
• The efforts of entrepreneurs are limited because of a lack of government rules.
• Entrepreneurs will have no real impact on the economy of South Africa
• Entrepreneur can make a significant contribution to South Africa's economy.

Nigeria has a new industry that builds tractors for agriculture. To protect this new industry from competition by lower priced foreign built tractors the Nigerian government would use what type of economic trade barrier to raise the price of imported tractors?

• Embargo
• Quota
• Tariff
• Treaty

Kemal manages an automobile factory. If he lives in a country that has a command economy

• The government will probably tell him how many cars to build this month
• He will decide all by himself how many cars to build this month
• The employees of the factory will tell him how many cars they feel like making this month
• He will probably examine sales figures before deciding how many cars to build this month