Economic Systems Quiz

What is the key factor in deciding the type of economic system to use in a country?

• The country's population size

• The amount of government involvement

• The country's cultural values

• The level of technological advancement

Which of the following is NOT one of the four major economic systems?

• Traditional economy

• Free market economy

• Command economy

• Barter economy

What are the three basic economic questions all societies must answer?

• Who will produce? What will be produced? Why will it be produced?

• What will be produced? How will it be produced? For whom will it be produced?

• When will it be produced? How much will be produced? Where will it be produced?

• Why will it be produced? Where will it be produced? For whom will it be produced?

What characterizes a traditional economy?

• Decisions based on futuristic predictions

• Economic decisions based on established customs or practice

• Decisions made by the government only

• Decisions driven by consumer demand

Which of the following is a characteristic of a free market economy?

• Centralized decision making by the government

• Minimal government involvement in the economy

• Equal distribution of resources among citizens

• Limited private ownership of property and resources

What is the 'profit motive' in a free market economy?

• The government's plan to increase its revenue

• The earnings that remain after all expenses have been paid

• The consumers' desire to find the best deals

• The competition's effect on lowering prices

What does a command economy mean?

• A system where the market makes all economic decisions.

• A system where property and resources are centrally owned and controlled by the government.

• A system where consumer choice dictates all economic outcomes.

• A system where foreign governments make economic decisions.

What is another term for a command economy?

• Free-market economy

• Centrally-planned economy

• Mixed economy

• Private sector economy

What is a mixed economy?

• An economy where the government has no role in economic decisions.

• An economy that combines elements of a command economy with a free market economy.

• An economy where all decisions are made by the private sector.

• An economy where consumer choice is completely absent.

Which sector does the government operate as the owner and decision-maker in a mixed economy?

• Informal sector

• Private sector

• Public sector

• International sector