Econ Unit 3 Review Guide

The key principle of a command economy is…

• The privatization of business and production of goods and services

• The government ownership, control and regulation of property

• The restoration of a bartering system in developing countries

• The organization of workers’ unions in industrialized nations

What is the difference between real GDP and nominal GDP?

• Real GDP accounts for the effects of inflation by comparing prices to a base year

• Nominal GDP accounts for the effects of inflation by including increases in price levels

• Real GDP does not account for the effects of inflation and tends to be ignored

• Nominal GDP does not account for inflation and is used to measure economic growth

In which economic system would a person expect the widest selection of consumer goods?

• market

• command

• traditional

• mixed

Which of the following would NOT be included in the calculation of GDP?

• A house built in 2006 and purchased this year

• A factory purchased by a business.

• Government purchase of a tank

• A Toyota produced in Utah

What question(s) must a society ask in order to make economic decisions?

• What goods and services will be produced?

• How will goods and services be produced?

• For whom will goods and services be produced?

• All of the Above

Which type of unemployment occurs when people lose their job because of a recession?

• structural

• frictional

• recyclable

• cyclical

What is one major criticism about the calculation of unemployment?

• It understates the true level of unemployment by not including discouraged workers

• It overstates the true level of unemployment by not including retirees

• It understates the true level of unemployment by including students

• It overstates the true level of unemployment by including part-time workers

In a command economy…

• the market controls what is produced

• the government does not try to regulate the economy

• the government controls what is produced

• the government decides what are public goods, and the market controls all other things

What is the most common economic system in the world today?

• market

• command

• traditional

• mixed

What term is used to describe the general increase in price level?

• Odeflation

• stagflation

• inflation

• hyperinflationption