Unit 2: Economic Systems

Why are public goods important for society?

• They ensure equal access to essential resources and services
• They promote competition and consumer choice
• They generate profit for private businesses
• They encourage individuals to be self-sufficient

How might cultural factors influence economic behavior in a society?

• Cultural preferences have no impact on economic decisions.
• Cultural values may shape individuals' attitudes towards work, consumption, and saving.
• Economic policies are entirely independent of cultural influences.
• Cultural diversity has no relevance to globalization and international trade.

How does an increase in consumer spending affect the two-factor circular flow model?

• It has no impact on the model; the circular flow remains unchanged.
• It leads to a decrease in business revenue as consumers save more money.
• It stimulates economic activity by increasing business revenue, prompting firms to hire more factors of production.
• Consumer spending causes a reduction in the income of households, disrupting the circular flow.

Select the portion of the Circular Flow model indicated.

• Households
• Firms
• Factors of Production Market
• Goods and Services Market
• Flow of Money

Select the portion of the Circular Flow model indicated.

• Firms
• Households
• Factors of Production Market
• Goods and Services Market
• Flow of Money

Select the portion of the Circular Flow model indicated.

• Goods and Services Market
• Firms
• Households
• Factors of Production Market
• Flow of Money

What is the main characteristic of a command economy?

• Free market forces determine the allocation of resources.
• Private individuals have complete control over the means of production.
• The government has complete control over the allocation of resources.
• Individual consumers make decisions about what to produce and consume.

Which economic system is characterized by private ownership of business and competition in the marketplace?

• Traditional Economy
• Command Economy
• Market Economy
• Mixed Economy

Who typically provides public goods and services?

• Private businesses
• Non-profit organizations
• Individuals
• Governments

Which of the following is an example of a public service provided by the government?

• Private health insurance
• Public park maintenance
• Subscription-based television service
• Online retail platform