Types of Governments and Economic Systems

What is a traditional economy based on?

• Manufacturing and trade
• Customs and traditions
• Government decisions
• Supply and demand

In a command economy, who makes the major economic decisions?

• The government
• Private businesses
• Consumers
• Farmers

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

• The government owns all businesses
• Prices are set by supply and demand
• People trade goods without money
• Wealth is shared equally

In a mixed economy, who controls the economy?

• Only the government
• Only private businesses
• A combination of the government and private businesses
• Farmers and local communities

What is an advantage of a traditional economy?

• Innovation and new technology
• Strong sense of community and predictability
• High profits for business owners
• Government control over resources

Which economic system allows for the most individual freedom to make choices?

• Command economy
• Traditional economy
• Market economy
• Mixed economy

n a command economy, what might the government do?

• Let people set their own prices for goods
• Control the production and pricing of goods
• Allow people to trade based on traditions
• Allow businesses to operate freely

How are goods and services exchanged in a traditional economy?

• Using a formal money system
• Based on government control
• Through bartering and trading
• Based on global supply and demand

A market economy is often called what?

• Free enterprise
• Government control
• Barter system
• Public ownership

Which of the following best describes a mixed economy?

• No government involvement in business
• All decisions are made by tradition
• Government and private businesses both play a role
• Private businesses are banned from operating