1.2: Economic Systems

Each of the following is a characteristic of capitalist economic systems, except:

• Profit incentives

• Free markets

• Private property protections

• Public ownership

An economic system based on public ownership and state management of capital resources.

• Capitalism

• Socialism

• Traditionalism

• Free Markets

Each of the following countries has a Communist-led government and socialist economy, except:

• China

• Cuba

• Vietnam

• India

Each of the following is an example of state planning as a driver of economic activity under capitalism, except:

• Military defense

• Education

• Universal healthcare

• Restaurants

Organize these options into the right categories

Groups:

(a) Laissez Faire

,

(b) Welfare State

• Minimal state involvement

• Graduated/ progressive taxes

• Sink or swim

• Social security programs

• Free markets only

• Few to no regulations

• Flat/ regressive taxes

• Unemployment benefits

• Universal healthcare

• Public education

​ (a)   , the economic system of the U.S. and much of the world, involves the ​ (b)   ownership of capital resources and their operation for the ​ (c)   of the owners. This system is praised for contributing to economic growth and development, but is sometimes criticized for ​ (d)   and instability.

• Capitalism
• private
• profit
• inequality
• socialism
• public
• use
• fairness

​ (a)   , an economic system found in countries with ​ (b)   -led governments, such as China, ​ (c)   , and Vietnam, is based on ​ (d)   ownership of capital resources and their management by the community through some combination of ​ (e)   and regulated markets. It is praised for rapid development and equality, but can also be criticized for limiting certain rights in property.

• Socialism
• Communist
• Cuba
• public
• state planning
• Capitalism
• Australia
• private
• free markets

Match the following

• Socialism

• Economic system based on private ownership of capital, operated for the owners' profit

• Free Markets

• Economic system based on public ownership of capital, operated for community use

• Capitalism

• Economic exchanges driven purely by profit-seeking, with prices determined through supply and demand

• Laissez Faire

• Economic exchanges driven by state incentives and penalties to fulfill established goals

• State Planning

• Economic policy in which the government plays little to no role in managing the economy

In the 20th century, the Soviet Union and Eastern European states were examples of what economic system?

• Laissez faire socialism

• Command-based socialism

• Market-based socialism

• Command-based capitalism

Today, the People's Republic of China illustrates the concept of:

• Socialism with markets and state-planning

• Socialism driven only by markets

• Socialism driven only by state-planning

• Capitalism driven only by markets