Economics: Economic Systems

Since the 1880's, the role of government in the United States has ________________.

• decreased

• been eliminated

• increased significantly

• had no impact on the economy

What motivates people to establish new businesses or expand existing ones?

• private property

• freedom of choice

• government regulations

• profit incentive

When the benefits of an economic action exceed the costs ______________.

• economic efficiency increases

• production of goods and services decreases

• economic efficiency decreases

• economic freedom decreases

The goal of economic stability is to reduce extreme ups and downs in the __________________.

• minimum wage

• factors of production

• standard of living

• nation's economy

Who owns the factors of production and makes economic decisions in a market economy?

• individuals

• economists

• government

• communities

Which of the following describes a free enterprise system?

• individuals are free to own and control the factors of production

• government owns and controls the factors of production

• businesses cannot make a profit

• there are no legal restrictions on freedom of enterprise

The goal of economic freedom is to ______________________.

• allow the government to control the economy

• allow each member of society to make choices

• limit competition

• prevent businesses from failing

All economic systems ____________________________.

• produce the same goods

• have the same resources

• must answer the same three basic questions

• distribute products through majority rule

One advantage of a controlled (command) economy is ________________.

• the incentive to work hard

• speed of rerouting resources

• consumer choices

• the opportunities for wealth

In a free enterprise system, who makes the decisions about what should be produced?

• sellers

• consumers

• entrepreneurs

• government