Economic systems 1.1.6

When Chris goes to his local grocery store the majority of the products are available in only one brand. Chris most likely lives in a country with which type of economy?

• market economy

• command economy

• mixed economy

• traditional economy

Why is it important to protect profit motive in a mixed economy?

• profit motive ensures that companies and workers are encouraged to participate and thrive in the market

• profit motive ensures that companies and workers are compensated for their participation in the market

• profit motive ensures that the government cannot restrict companies' and workers' participation in the market

• profit motive ensures that the government is encouraged to regulate companies participating in the market

A German toy company manufactures the products within U.S. borders. If the company decides to downsize and cut productions by half, what is most likely to be impacted?

• neither the U.S. GDP nor GNP

• U.S. GNP

• both the U.S. GDP and GNP

• U.S. GDP

The Federal Reserve Board can guard against recession by taking which of the following actions?

• Raising or lowering interest rates and regulating factors of production

• Regulating factors of production and controlling the money supply

• Raising or lowering interest rates and controlling the money supply

• Raising or lowering interest rates and determining fiscal policy

Which of the following lists correctly identifies a few of the basic elements all market economies share?

• Individual ownership of private property, the law of supply and demand government regulation of key resources

• Individual ownership of private property; the right to make a profit from private property: government regulation of key resources

• Individual ownership of private property; the right to make a profit from private property; the law of supply and demand

• Individual ownership of private property; the right to make a profit from public property; the law of supply and demand

A company's profit motive benefits consumers by ensuring the products and services they need are available at a high quality. What is this describing?

• the invisible hand

• Laissez-faire

• private enterprise

• mixed economy

In a mixed economy, the government is most likely to control the factors of production in which industry?

• the apparel industry

• the health care industry

• the automotive industry

• the technology industry

Which type of economy provides the least incentive for companies and workers to improve?

• traditional economy

• market economy

• mixed economy

• command economy

Which benefit is often associated with command economies and most likely achieved in a mixed economy?

• the establishment of social welfare

• the absence of monopoly abuses

• the ability to respond quickly to financial crisis

• the protection of personal freedoms

In which type of economy would you expect the standards of living to be highest?

• traditional economy

• command economy

• market economy

• planned economy