Governments have often become involved in market-based economies in order to

Address various limits of the free market system

What distinguishes an authoritarian government from a democratic one?

It requires strict obedience from its citizens

Which of the following explains why a city firework show is provided as a public good?

Nonpayers cannot be prevented from seeing the fireworks

If a student volunteers at a food pantry on Fridays after school, which is a negative?

The student's parents have to drive to the food pantry

Why does innovation promote economic growth?

Introducing new goods and services that create new markets

What did Karl Mark believe about capitalism?

The it led to exploitation of workers

Police protection is an example of what gov role in the circular flow model

Producing G/S from factors purchased in the factor market

Market failure occurs whenever

Free markets fail to distribute resources efficiently.

Which of the following represents a difference between Socialism and Communism?

S may allow some free market practices; C does not

Distribution of income received in the form of rent, wages, or interest determines

Who consumes goods and services

How does innovation promote economic growth?

Introducing new goods and services that create new markets

How did communist China manage to survive when the Soviet Union did not?

China introduced capitalist reforms

How is a society's economic system defined?

How it answers the three basic economic questions

Why do markets exist?

To allow people to exchange goods and services

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Topic 2 Test

25 termsStudBud Administration451 plays

Economic Systems

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Questions 25

Answers

1
Which economic goals reflects the desire of individuals to make their own choices
Efficiency
Freedom
Security
Equity
2
China's economy is considered more mixed than North Korea's because China
Was the first to adopt communism
Has traditionally relied on central planning
Recently took control of Hong Kong
Has freer markets
3
Governments have often become involved in market-based economies in order to
Preserve the traditional economy
Reduce disruptive innovation
Address various limits of the free market system
Address shortcomings of central planning
4
What distinguishes an authoritarian government from a democratic one?
It requires strict obedience from its citizens
Discourages a strong central government
It respects individual rights
It pursues capitalist economic policies
5
Which of the following explains why a city firework show is provided as a public good?
Each consumer pays a fee to see the fireworks
Nonpayers cannot be prevented from seeing the fireworks
Firework displays usually take place in a public area
Fireworks are a scarce resource
6
If a student volunteers at a food pantry on Fridays after school, which is a negative?
The student might decide to volunteer two days a week
The student might make some new friends
The student's parents have to drive to the food pantry
The student might learn a new skill
7
Why does innovation promote economic growth?
Reinforcing individual values in a society
Introducing new goods and services that create new markets
Ensuring people's freedom to make their own choices
Rewarding the development of efficient technology
8
What did Karl Mark believe about capitalism?
The it led to exploitation of workers
That it was the source of all value
That it was the inevitable product of socialism
That is distributed wealth fairly in society
9
Police protection is an example of what gov role in the circular flow model
Contributing to the M flow between households and firms
Hindering the P flow of factors between Hs and Fs in PM
Producing G/S from factors purchased in the factor market
Making purchases of F of P in the product market
10
Market failure occurs whenever
Government builds infrastructure.
Free markets fail to distribute resources efficiently.
Goods fail to arrive at a market in a timely fashion.
Voluntary exchange in a market fails to result in a sale.
11
Adam Smith wrote...?
The Communist Manifesto
General Theory of Employment, Interest, and Money
Democracy in America
Wealth of Nations
12
Which country is considered the freest economy in the world?
Mexico
Canada
Singapore
Iran
13
What are the three basic economic questions all societies must answer?
Why? When? and How?
What? How? and Who?
Who? Who? and Who?
Where? Who? and Who?
14
What is one reason centrally planned economies tend not to be efficient?
Factories produce too many types of goods
Workers lack incentive to work
Decision-makers do not have enough power
Decision making is too decentralized to be effective
15
Which of the following represents a difference between Socialism and Communism?
S emphasizes the equal distribution of wealth; C does not
S requires control of all productive resources; C does not
S depends on authoritarian gov; C does not
S may allow some free market practices; C does not
16
Where in the circular flow model does a new car on display in a dealership belong?
Factor market, physical flow
Product market, monetary flow
Product market, physical flow
Factor market, monetary flow
17
Where in the circular flow model does a paycheck belong?
Product market, monetary flow
Factor market, monetary flow
Factors market, physical flow
Product market, physical flow
18
Distribution of income received in the form of rent, wages, or interest determines
Who consumes goods and services
Who produces goods and services
Where goods and services are consumed
How goods and services are produced
19
What is a disadvantage of central planning?
No emphasis on economic equity
Over reliance on profit incentive
Lack of economic efficiency
Too much individual freedom
20
Which is an example of why the US government makes transfer payments?
To suppress the factor market
To create a command economy
To limit economic freedom
To support retired people
21
Who makes most basic decisions in a centrally planned economy?
Government
Investors
Consumers
Market Forces
22
How does innovation promote economic growth?
Introducing new goods and services that create new markets
Rewarding the development of efficient technology
By reinforcing traditional values in society
Ensuring people's freedom to make their own choices
23
How did communist China manage to survive when the Soviet Union did not?
Chine was more effective at central planning
China introduced capitalist reforms
China did not engage in a military buildup
China abandoned central planning
24
How is a society's economic system defined?
Resources it uses to produce goods and services
How it answers the three basic economic questions
Trade-offs it accepts in order to produce goods and services
Decisions it makes about who consumes goods and services
25
Why do markets exist?
To concentrate the productive efforts of individuals
To increase profits for business owners
To allow people to earn money
To allow people to exchange goods and services

Topic 2 Test Flashcards | StudBud