Chapter 2 Economic Systems

The United States economy is a mixed economy

• based on a free market, but allowing some government intervention.

• based on a traditional economy, but allowing some government intervention

• based on a centrally planned economy, but limiting government intervention.

• based on a free market, allowing no governmental intervention.

Which U.S. economic and social goal is missing from other diagram above?

• economic interdependence

• economic growth

• minimum wage

• No answer text provided.

The ways in which factors of production are combined determines the answer to all of these economic questions, except which one?

• What will be produced?

• How can we provide a safety net?

• How will goods and services be produced?

• Who will consume the goods?

What does a circular flow of a market economy show?

• how households and firms exchange money, resources and products.

• how households choose the goods and services they buy.

• how households and firms need the same resources at the same time.

• how firms control employee wages and salaries.

What is a positive externality of a new high school?

• more traffic on the roads.

• student purchases at nearby stores

• a rise in property taxes

• more noise in the neighborhood

The economic value of economic freedom primarily concerns which of the following?

• Reducing waste

• Choice in the economy

• A safety net

• Fairness for everyone

Protection from layoffs, illnesses, injuries, or disabilities falls under the goal of

• Economic equity

• Economic efficiency

• Economic growth

• Economic security

The resources are owned by the government. Government officials decide what and how goods are produced and how they will be consumed.

• Centrally planned/ Command Economy

• Mixed Economy

• Market Economy

• Capitalism

An economic system in which the government makes decisions about what and how much is produced is a ________________.

• Centrally planned/ Command Economy

• Mixed Economy

• Capitalistic Economy

• Marketplace Economy

The purpose of government in a command economy is to

• Ensure the availability of consumer products

• Encourage entrepreneurs

• Make major economic decisions

• Promote economic freedom