Economic systems

Which pair of economic institutions can be found in a market economy?

• local government and charities

• monopolies and commercial banks

• nationalised industries and partnerships

• stock exchange and public corporations

In a city, what is most unlikely to be provided by the private market system?

• a museum

• a school

• sports field

• street lights

Which type of business organisation is necessarily in the public sector of the economy?

• multinational company

• public limited company

• public corporation

• sole trader

Which situation indicates a mixed economy?

• Economic activity is controlled entirely by the private sector

• Individual choices are unaffected by government actions

• Services are provided by both private and public sectors.

• The government carries out all planning and decision making

Unlike the UK and US, a significant proportion of the shares on the stock exchanges of China and Russia are of state-owned enterprises.

Which judgement about China and Russia can be made from this information?

• their distribution of income and wealth

• their level of development

• their stages of production

• their type of economic system

Cuba is implementing free market reforms. What is a likely advantage of this?

• a wider variety of goods and services produced

• greater equality between the different groups in society

• increased provision of public goods

• less consumption of goods with external costs

What is a characteristic of tertiary industries?

• They are located away from centres of population

• They do not sell to the final consumer

• They tend to be labour-intensive

• They transform raw materials into goods.

What can be found in a market economy?

• externalities and monopolies

• interest rates and public goods

• public corporations and market prices

• tax rates and commercial banks

An economy operates entirely as a market system. Which type of service would not be provided in such an economy?

• commercial banking services

• free government health services

• Private educational services

• profitable retail services

China, the world’s second largest economy, is becoming more like a market economy. Which policy would contribute directly to such a change?

• abolishing state control completely

• encouraging consumers to spend more and save less

• reducing exports and encouraging more imports

• transferring wealth from the state sector to the private sector