Understanding Economic Systems

What are the three fundamental questions that define an economic system?

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

• Who to produce for, when to produce, and where to produce

• Why to produce, what to produce, and for whom to produce

• How to produce, when to produce, and for what purpose to produce

According to Karl Marx, what is the defining feature of communism?

• Government ownership of all resources

• Free market principles

• Abolition of private property

• The existence of private property

What is a command economy?

• An economy based on traditional barter systems

• An economy completely controlled by the government

• An economy with mixed government and private control

• An economy where market forces decide what to produce

What does the 'invisible hand' refer to in a free market economy?

• The manipulation of the market by large corporations

• The role of competition in setting prices

• Government regulation of businesses

• The self-regulating nature of the marketplace

What role does government play in a free market economy according to the video?

• Controlling the production and distribution of all goods

• Only providing defense and public order

• No role, as markets are completely free

• Regulating production, providing public goods, and maintaining order

Why might a government intervene in a free market economy?

• To regulate production and prevent market failures

• To ensure that all businesses make a profit

• To abolish private property

• To take control of all businesses

What is the primary reason for government regulation of markets?

• To ensure that all citizens have equal wealth

• To prevent businesses from making profits

• To address issues like pollution and worker rights

• To completely control the economy

What is a mixed economy?

• An economy based solely on traditional customs

• An economy that combines elements of both free markets and government intervention

• An economy with no government intervention

• An economy where only the government makes economic decisions

What does the circular flow model illustrate?

• The exclusive interaction between businesses and the government

• The cycle of production and consumption in a command economy

• The unidirectional flow of money from government to businesses

• The flow of resources between households and businesses

How has China's economy evolved in recent years?

• From a mixed economy to a purely capitalist economy

• From a command economy to a socialist market economy

• From a socialist market economy to a command economy

• From a free market to a command economy