Midterm Review 4 (Economic Systems)

What is the foundation of the economic system of capitalism?

• The theory focuses on private ownership that rewards innovative business through the profit motive.

• The theory focuses on government assistance to ensure the financial stability of the monetary policies of government.

What is the foundation of the economic system of socialism?

• The theory stresses government intervention to regulate businesses and promote the general welfare.

• The theory focuses on government control of all aspects to business to prevent economic inequalities among citizens.

What is the foundation of the economic system of communism?

• The theory focuses on equal distribution of resources and wealth through government regulation.

• The theory stresses the economic concepts of free enterprise and law of supply and demand.

What is the foundation of the economic system of corporatism?

• In corporatism, the economy and political structure is often controlled by large business groups.

• In corporatism, communal distribution of wealth is controlled by government regulation of large publicly traded businesses

How does our nation regulate the monetary flow?

• Congress created the Federal Reserve System to control the printing of money and regulate the monetary flow.

• The President created the Internal Revenue Service to code various taxes and maintain financial wealth of the government.

How does our nation regulate fiscal policy to promote the general welfare?

• Congress has the power to create laws that deal with revenues and expenditures which are in turned approved by the President.

• The Federal Deposit Insurance Corporation or FDIC controls interest rates and fluctuation of the New York Stock Exchange.