Understanding Economic Systems

What is a key characteristic of a mixed economy?

• The government makes all economic decisions.

• Private and public sectors coexist and operate in the economy.

• Markets operate without any form of government intervention.

• Economic decisions are made based on tradition and customs.

In a market economy, who primarily determines what goods and services are produced?

• The government

• Consumers

• Large corporations

• International trade agreements

Which of the following is a characteristic of a command economy?

• High levels of competition among businesses

• Prices are determined by supply and demand

• The government plans and controls the economy

• Consumers have a wide choice of goods and services

What is a major advantage of a market economy?

• It ensures equal wealth distribution.

• It encourages innovation and efficiency.

• It guarantees employment for everyone.

• It prevents any form of economic recession.

Which of the following best describes a mixed economy?

• An economy where trade and industry are controlled by private owners for profit.

• An economy where all property is owned by the community and each person contributes and receives according to their ability and needs.

• An economy that features characteristics of both capitalism and socialism.

• An economy entirely controlled by the government with no private sector.

In which economic system are the means of production most likely to be owned by the state?

• Market Economy

• Mixed Economy

• Command Economy

• Traditional Economy

How does a command economy attempt to reduce unemployment?

• By allowing market forces to dictate employment

• Through government programs and the creation of state jobs

• By encouraging foreign investment and privatization

• Through tax incentives for small businesses and entrepreneurs

What is a disadvantage of a market economy?

• It can lead to economic inequalities.

• It discourages competition.

• It limits consumer choice.

• It restricts personal freedom.

Which economic system is best known for its flexibility and ability to adapt to change?

• Command Economy

• Market Economy

• Mixed Economy

• Traditional Economy

In a market economy, how are the prices of goods and services determined?

• By the government

• Through central planning

• By supply and demand

• By international market trends