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