Economic Systems Quiz-Khan Academy

What is a command economy?

• An economy where the factors of production are controlled by private companies

• An economy where the government controls the factors of production

• An economy where individuals control the factors of production

• An economy where there is no production

Which country is a good example of a command economy during the 20th century?

• Germany

• Soviet Union

• China

• United States

In a command economy, who owns the factories and farms?

• Local communities

• Private individuals

• The government

• Foreign investors

How are goods and services allocated in an extreme command economy?

• Based on competition among individuals

• Based on government allocation

• Based on random selection

• Based on who is willing to pay the most

What is the main factor that determines production in a market economy?

• Government regulations

• Foreign trade agreements

• Competition among firms

• Individual preferences

What motivates innovation and hard work in a market economy?

• Equal distribution of resources

• Competition and incentives

• Guaranteed income

• Government subsidies

What is a key advantage of a command economy according to the text?

• Fairness and equality

• Innovation and competition

• Market demand and supply

• Individual preferences

What is the main reason why most economies have transitioned to a market economy?

• To limit individual preferences

• To promote innovation and productivity

• To increase inequality

• To reduce government control

What type of economy does the United States have?

• Pure command economy

• Socialist economy

• Pure market economy

• Mixed economy

What term is used to describe an economy that falls between a command economy and a market economy?

• Capitalist economy

• Hybrid economy

• Socialist economy

• Communist economy