1.1f Economic Systems

According to the video, what are the three things that an economy / country has to figure out to have an economic system?

• When to produce, where to produce it, and who gets it

• What to produce, how to sell it, and who gets it

• What to produce, how to produce it, and who gets it

• What to produce, how to distribute it, and who gets it

In a planned economy, who controls the factors of production?

• Individuals

• International organizations

• Businesses

• The government

What is the concept of the 'invisible hand' in a free market economy?

• The government's control over the economy

• The influence of consumers (demand) on production (supply)

• The power of monopolies in the market

• The regulation of prices by the government

What is the role of the government in a free market economy according to the text?

• To completely stay out of economic affairs

• To regulate all prices and wages

• To maintain the rule of law and provide public goods and services

• To control all aspects of production

What is the circular flow model used to explain in the text?

• The process of international trade and financial transactions

• The interactions between businesses, individuals, and the government in the economy

• The flow of money in the stock market

• The distribution of resources in a command economy

Which country is mentioned as an example of a mixed economy in the text?

• New Zealand

• China

• Denmark

• North Korea

What does the text suggest about the optimal amount of government involvement in an economy?

• It should be extensive to ensure complete control over production

• It should be equal in all countries to maintain economic stability

• It should be minimal to allow for complete free market operations

• It depends on personal values and country / societal needs

According to the text, what is the main takeaway about economic systems and government involvement?

• There are no right solutions, only "trade-offs"

• The government should always have complete control over the economy

• Economic theories and models are perfect in the real world

• Flexibility in economic systems is not important