Eco - Chapter 2 - Economic Systems and the American Economy

All economic systems:

• produce the same goods
• must answer the same three basic questions
• have the same resources
• distribute products through majority rule

Almost all economic systems today are:

• traditional economies
• mixed economies
• command economies
• market economies

Who owns the factors of production and makes economic decisions in a market economy?

• individuals
• governement
• economists
• communities

One advantage of a controlled economy is:

• the incentive to work hard
• consumer prices
• speed of rerouting resources
• the opportunities for wealth

According to Adam Smith:

• the role of the government is to allocate resources
• government should not interfere in the marketplace
• a mixed economy combines all of the benefits of a command and market economy
• left to themselves, individuals would mishandle the economy

In a capitalist system, most property is:

• private property
• owned by the government
• regulated by the government
• owned by banks

Which of the following countries has a command economy?

• France
• Taiwan
• Russia
• North Korea

A laissez-faire system is one in which:

• government controls the factors of production
• individuals and the government make economic decisions
• government interference is the economy is minimal
• government purchases goods and services from consumers

What goods and services should be produced, how they should be produced, and who should share in what is produced are the three basic questions addressed by:

• market economies
• command economies
• mixed economies
• all economies

In a free enterprise system, who makes the decisions about what should be produced?

• sellers
• entrepreneurs
• consumers
• governement