Chapter 2

(Lesson 1): Which statement describes a disadvantage of a command economy?

• Items tend to be produced solely for the sake of profit

• It cannot "change direction" easily if the need arises to do so

• It does little to help the less advantaged obtain the goods and services they need

• Nothing stops the government from producing things that people don't need or want

(Lesson 1): How is the principle of "There's No Such Thing As a Free Lunch" illustrated in a socialist economy?

• Socialist economies tend to collapse when they become too large

• The marketplaces in a socialist economy are free for anyone to enter

• Socialist policies offer advantages to the wealthy at the expense of those less well-off

• Socialist economies tend to offer extensive government services but have high tax rates

(Lesson 1): Which of the following states an advantage of a traditional economy?

• Property rights are based on tradition

• Creativity knows exactly what their function is

• Everyone knows exactly what their function is

• There's no bureaucracy to interfere with organizing the economy

(Lesson 1): What kind of economy offers uniformity in wages regardless of the individual productivity?

• all economies

• traditional economies

• command and socialist economies

• market and free-enterprise economies

(Lesson 2): Which of the statements best describes the communist ideal?

• a classless society in which everyone works for the common good

• a classless society in which workers are motivated by financial incentives

• a society in which the working class is motivated by incentives to produce goods

• a society in which a small ruling class administers resources for the common good

(Lesson 2): Which of these is an accurate statement about mixed economies today?

• There are more mixed economies in the world than any other kind

• Very few economies today can be accurately described as "mixed"

• Mixed economies exist mostly in nations with communist governments

• Most nations that once had a mixed economy have evolved into command economies

(Lesson 2): Which of the following describes a move away from capitalism?

• Sweden's 1980s cutback on social programs

• the transformation of the former Soviet Union to today's Russia

• the nationalization of major industries in Hugo Chave'z Venezuela

• economic reforms following the Great Depression in the United States

(Lesson 3): Which country is an example of a capitalist country?

• Cuba

• Singapore

• Venezuela

• North Korea

(Lesson 3): What conclusion can be drawn about capitalism from South Korea's economic growth in the late 20th century?

• Capitalism can restore a damaged economy

• There is no real difference between socialism and capitalism

• Socialism can revive an economy over a prolonged period of time

• A transition from capitalism to a command economy can involve struggle

(Lesson 3): Which statement describes why the people in a nation with a command economy might resist a shift to a free market economy?

• People who hold political power are threatened by fundamental changes

• Workers are reluctant to give up their participation in a classless society

• Workers are reluctant to accept complete government control of their economy

• Factory and business owners are reluctant to place their capital under worker authority