Econ: Ch.3 Economic Systems

The major types of economic systems are

• command, market, and mixed.
• traditional, market, and mixed.
• traditional, command, and market.
• communist, socialist, and capitalist

An economic system is successful when it

• creates a large number of wealthy people.
• maintains normal unemployment levels.
• controls government agencies.
• satisfies the needs of its people.

In a ____________ economy, a central authority makes most of the WHAT, HOW, and FOR WHOM decisions.

• traditional
• command
• market
• free market

The economic system that answers the four basic economic questions according to societal customs is called

• command
• market
• mixed
• traditional

Which of the following is NOT a major characteristic of a pure market economic system?

• lack of competition
• freedom of enterprise
• freedom of choice
• little or no government control

The main drawback of the traditional economy is that it

• has a great deal of uncertainty
• fails to answer the WHAT, HOW, and for WHOM questions
• tends to discourage new ideas and ways of doing things 
• requires a large government bureaucracy

Today, traditional economies

• exist in very few areas of the world.
• are common in many parts of Latin America and Asia.
• exist only in the developed nations of the world.
• are found only in the Middle East.

One advantage of a ___________ economy is that it gradually adjusts to change over time.

• traditional
• command
• market
• socialist

In a command economy, producers of goods and services make decisions primarily based on

• government planning.
• past customs and production methods.
• current profit potential.
• marketplace signals.

Almost all economic systems today are

• pure market economies.
• mixed economies.
• command economies.
• traditional economies.