Economics Review Ch. 2&3

Which of these is a major advantage of a market economy?

• it can change direction rapidly as needed when markets change

• there is efficient government control of production and distribution

• people are likely to be offered goods and services they CANNOT afford

• there is a high degree of individual freedom

Which of these is the most striking example of the costs and risks of pure capitalism?

• Great Leap Forward

• Five-Year Plan

• Gosplan

• Great Depression

In what type of economy does only the government decide whether houses or apartments will be built?

• market

• traditional

• command

• mixed

Which of these statement is descriptive of a market economy?

• government determines what is produced and by whom

• major economic decisions are made by individuals, not for them

• major economic decisions are made for individuals, NOT by them

• most media is state-owned and operated

Which of these statements describes a disadvantage of a traditional economy?

• difficult economic decisions are made by the state

• new ways of doing things are encouraged

• everyone knows his or her role

• new ways of doing things are discouraged

One of the characteristics of a capitalist free enterprise economy is

• central planning

• minimum wage

• voluntary exchange

• consumerism

Who ultimately determines the success of a product?

• the business producing the product

• the government

• the consumer

• the store selling the product

We say the United States has a "modified" free enterprise economy because almost everything we do and everything we buy is in some way affected by ____.

• inventors

• business

• money

• government

Consumers can influence the production and sale of goods by

• "voting" with their dollars

• reducing their spending habits

• saving their money

• paying off their debt

What is one of the benefits related to economic equity?

• conserving resources

• unemployment compensation programs

• receiving equal pay for equal work

• living on a fixed income