Key terms Chapter 2: Economic Systems

In a ____, the three basic economic questions of what to produce, how to produce, and for whom to produce are answered in the same way they have been for generations.

• voluntary exchange

• traditional economy

• command economy

• mixed economy

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In a ____, the government makes most economic decisions.

• command economy

• traditional economy

• mixed economy

• global economy

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Two systems in which government plays a strong role are communism and ____.

• market economy

• democracy

• socialism

• totalitarianism

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In the transition between types of economic systems, the government may ____ industries, taking them out of private ownership.

• nationalize

• privatize

• monopolize

• incentivize

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A ____ economy rests on private ownership.

• command

• state

• national

• market

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The rights of individuals and groups to own business and resources is known as____.

• private property rights

• public property rights

• bill of rights

• civil rights

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A market economy depends on ____ to help produce the highest quality goods at the lowest price.

• consumption

• procrastination

• competition

• collusion

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Sellers are motivated by the chance to make a ____, so they try to use their resources as efficiently as possible.

• profit

• loss

• statement

• social media post

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The ____ shows the flow of money as well as the flow of products and resources.

• assets model

• cash flow model

• production flow model

• circular flow model

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____ takes place between buyers and sellers in a market economy.

• voluntary exchange

• command exchange

• global exchange

• friendly exchange

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(A) 23.A