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Economic Systems
Economic Systems
30 terms
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Introduction to the basics of economics and systems
Flashcards
30 cards
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Practice quiz
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Questions
30
Answers
1
What do people supply in return for factor payments?
services, goods, or traditions
land, labor, or capital
innovation, profit, or goods
innovation, labor, or trade
2
Which are the government’s three goals for promoting economic strength?
high employment, increased spending, and low taxes
low unemployment, low prices, and low taxes
steady growth, high prices, and innovation
high employment, steady growth, and stability
3
Why does the government protect inventors and authors by offering them patents and copyrights?
to promote innovation
to strengthen American culture
to regulate the business cycle
to encourage free trade
4
The ________ system is another name for a market economy.
Centrally Planned
Free Enterprise
Socialist
Command
5
Which is a positive externality of a new high school?
more noise in the neighborhood
more traffic on the roads
a raise in property taxes
student purchases at nearby stores
6
How will consumers react to the incentive of a higher price on a good or service?
positive, buy more products
remain stable
negative, buy more products
negative, buy less products
7
A person who believes that wealth should be evenly distributed throughout society is
a socialist.
an entrepreneur.
a capitalist.
a communist.
8
a system to protect people experiencing unfavorable economic conditions
market exchange
soul glo
factor payments
safety nets
9
What is the government’s role in controlling externalities in the American economy?
limit all externalities to stop market failures.
limit positive and encourage negative externalities.
encourage positive and limit negative externalities
encourage all externalities to increase competition
10
Traditional economies usually
adapt to innovation
avoid change
11
The United States economy is a mixed economy
traditional economy with some government intervention
free market with some government intervention
centrally planned with no government intervention
free market with no government intervention
12
Social Security withheld from your paycheck is for
cash transfers for the elderly and poor
401K retirement account
cash transfers for those hurt on the job
health insurance for the elderly and poor
13
To improve its standard of living, a nation’s economy must
remain stable
grow throw innovation
allow the government to make decisions
reach economic equity
14
Which of the following philosophers recommended the free market
Vladimir Lenin
Adam Smith
Karl Marx
Friedrich Engels
15
Which of the following is considered a "cash transfer"
grants
unemployment compensation
section 8
food stamps
16
Solar power and wind power are examples of what kind of resources?
labor
capital
renewable
nonrenewable
17
When did the nation’s welfare system begin?
during World War I
during the Great Depression
during the Civil War
during the War on Poverty
18
Health insurance for the elderly, the poor, and the disabled is provided by
Worker’s Compensation.
the unemployment insurance program.
Medicare and Medicaid.
TANF
19
What is the profit motive?
incentive to make money
exchange of goods
money that a business makes
opportunity for success
20
What is one of the most important principles of economics?
scarcity
distribution
money
globalization
21
How is the economic system in China today different from the one in Soviet Russia?
The Chinese government owns firms in major industries.
The Chinese government allows far more economic freedom.
The Chinese government is not authoritarian.
The Chinese government is socialist, rather than communist.
22
In a command economy, the government regulates how goods and services are distributed.
False
True
23
the level of economic prosperity
traditional economy
specialization
poverty threshold
standard of living
24
What is one way the Constitution protects the free enterprise system?
It establishes the principle of voluntary exchange.
It prevents the government from making contracts.
It spells out the rights of consumers.
It recognizes private property rights.
25
What does the process of specialization do for an economy?
It makes production more efficient.
It makes labor easier to control.
It fosters competition.
It eliminates unemployment.
26
Which of the following describes the physical flow from households to firms?
factors of production
goods and services
consumer expenditures
wages, rent, dividends
27
In a free enterprise system, who decides what will be produced?
firms
producers
consumer
government
28
Roads and bridges are examples of how government provides
grants
public goods
market failure
in kind benefits
29
What is one way the government might try to promote economic growth?
increase spending
reduce prices
raise taxes
produce more goods
30
Competition is a driving force in a free enterprise economy.
True
False
