Understanding Economic Systems Quiz

Which of the following best describes a traditional economy?

• An economy where decisions are made based on customs and historical precedent.

• An economy where the government makes all economic decisions.

• An economy driven by supply and demand with little government intervention.

• An economy that relies on technological advancements for growth.

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DOK Level 2: Skill/Concept

In a command economy, who primarily decides what goods and services are produced?

• Individual consumers

• Private businesses

• The government

• International markets

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DOK Level 2: Skill/Concept

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

• Centralized decision-making

• Government ownership of resources

• Price determined by supply and demand

• Production based on tradition

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DOK Level 2: Skill/Concept

How does a traditional economy typically determine the distribution of resources?

• Through government planning

• Based on historical roles and customs

• By market competition

• Through technological innovation

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DOK Level 2: Skill/Concept

What is a potential disadvantage of a command economy?

• Lack of innovation due to limited competition

• Over-reliance on historical methods

• Unpredictable market fluctuations

• Excessive consumer choice

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DOK Level 2: Skill/Concept

In a market economy, what role does competition play?

• It limits consumer choices.

• It drives innovation and efficiency.

• It ensures government control.

• It maintains traditional practices.

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DOK Level 2: Skill/Concept

Which type of economy is most likely to have a barter system?

• Command economy

• Market economy

• Traditional economy

• Mixed economy

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DOK Level 2: Skill/Concept

What is a common feature of both command and market economies?

• Reliance on historical customs

• Government regulation

• Use of currency for transactions

• Centralized decision-making

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DOK Level 2: Skill/Concept

In which type of economy are consumer preferences most likely to influence production decisions?

• Command economy

• Market economy

• Traditional economy

• Mixed economy

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DOK Level 2: Skill/Concept

How does a command economy typically address the issue of scarcity?

• By allowing market forces to determine allocation

• Through government planning and quotas

• By relying on traditional methods

• By increasing consumer choice

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DOK Level 2: Skill/Concept