Unit 5: Economic Systems Test Review

Which TWO activities are characteristics of a traditional economic systems? (SELECT TWO ANSWERS)

• Dependency on currency

• Subsistence Farming

• Cottage Industries

• Commercial Farming

What is another name for a Free Market Economy? (SELECT ALL THAT APPLY)

• Communism

• Socialism

• Capitalism

• Free Enterprise

What is a Free Market Economy?

• An economic system in which subsistence farming and bartering are the main economic activity.

• An economic system where the government owns and controls the factors of production.

• An economic system where people own and control the factors of production and where government has minimal interference.

• An economic system where the government owns the major industries and promotes extreme social programs.

Who owns the means of production in a Free Market Economy?

• The government

• The people

• The tribe leaders

• The church

What are the goals in a free market economy? (SELECT 3 CORRECT ANSWERS)

• Private Ownership

• Make Profits

• Promote business competition

• Government control

• Equal ownership of industries

A global economic system where the economic activities depend on goods being shipped worldwide, companies outsourcing and offshoring to cheaper labor regions, and the promotion of products and price competition worldwide.

• Globalization

• Commercial Agriculture

• Cottage Industries

• Free Trade Agreements

How do free trade zones promote economic growth?

• Free trade zones promote economic growth by limiting foreign investment.

• Free trade zones promote economic growth by reducing international trade barriers such as tariffs.

• Free trade zones promote economic growth by increasing tariffs on imported goods.

• Free trade zones promote economic growth by restricting international trade.

What is one advantage of outsourcing? (SELECT ALL THAT APPLY)

• Promote innovation in home country.

• Cut labor costs.

• Increase the employment rate in home country.

• Increased access to specialized skills abroad.

The term used when there is not enough of something to go around is __________________.

• scarcity

• economic choices

• resources

• opportunity cost

Which is NOT a question all economies have to answer?

• When will products be produced?

• How will products be produced?

• What products will be produced?

• Who gets access to the products?