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