Understanding Economic Systems Test

What is the main feature of a traditional economic system?

• Centralized decision-making

• Reliance on customs and traditions

• Government ownership of resources

• Free market competition

Tags

DOK Level 1: Recall

Who decides what goods and services are produced in a market economy?

• The government

• Consumers and producers

• Central planners

• International organizations

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DOK Level 1: Recall

What does the law of demand state?

• As price increases, demand increases

• As price decreases, demand decreases

• As price increases, demand decreases

• Demand is unaffected by price changes

Tags

DOK Level 1: Recall

Which is a characteristic of a command economy?

• Private ownership of resources

• Market-driven prices

• Government control of production

• Competition among businesses

Tags

DOK Level 1: Recall

What role does the government play in a mixed economy?

• No role at all

• Complete control over all economic activities

• Regulation and oversight

• Sole producer of goods and services

Tags

DOK Level 1: Recall

Which economic system is characterized by private ownership and free markets?

• Command economy

• Traditional economy

• Market economy

• Mixed economy

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DOK Level 1: Recall

What does the law of supply state?

• As price increases, supply decreases

• As price decreases, supply increases

• As price increases, supply increases

• Supply is unaffected by price changes

Tags

DOK Level 1: Recall

In which economy does the government make all economic decisions?

• Market economy

• Mixed economy

• Command economy

• Traditional economy

Tags

DOK Level 1: Recall

What is an advantage of a market economy?

• Equal distribution of wealth

• Efficient allocation of resources

• Government control of prices

• Stability and predictability

Tags

DOK Level 1: Recall

Which best describes a mixed economy?

• An economy with no government intervention

• An economy with only government intervention

• An economy with both private and public sector involvement

• An economy based solely on barter

Tags

DOK Level 1: Recall