1A Economic Systems 2.2

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 its products within U.S. borders. If the company decides to downsize and cut production

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 programs

• The absence of monopoly abuses

• The ability to respond quickly to financial

• 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