Understanding Economic Systems Quiz

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

• Government controls all production

• Prices are determined by supply and demand

• Resources are allocated by tradition

• Central authority makes all economic decisions

In a traditional economy, how are economic roles typically determined?

• By government policies

• By market competition

• By customs and traditions

• By technological advancements

Which of the following best describes a command economy?

• Businesses operate with little government intervention

• Economic decisions are made by individual consumers

• The government makes all economic decisions

• Economic roles are based on family heritage

What is a key feature of a mixed economy?

• Complete absence of government intervention

• Only traditional methods are used for production

• Combination of private and public sector involvement

• All resources are owned by the state

How does a traditional economy typically handle technological change?

• Rapid adoption of new technologies

• Resistance to change and reliance on old methods

• Government mandates new technology use

• Market forces drive technological adoption

Which type of economic system is most likely to support private business ownership and competition?

• Command economy

• Traditional economy

• Market economy

• Mixed economy

In which type of economy are resources typically owned collectively or by the government?

• Market economy

• Mixed economy

• Traditional economy

• Command economy

What is a common disadvantage of a command economy?

• Lack of government oversight

• Inefficient resource allocation

• High levels of competition

• Unpredictable market fluctuations

Which of the following is a similarity between a mixed economy and a market economy?

• Both have no government involvement

• Both rely solely on traditional methods

• Both allow for private business ownership

• Both have centrally planned production

What is the main form of trade in a traditional economy?

• Barter system

• Cryptocurrency

• Futures market

• Debit cards