In a communist economy, workers are

always employed by the government or government owned firms

When a nation’s economy nationalizes it changes from

private ownership to public ownership

With capitalism, investment is driven by

private parties seeking profits

In economic terms, property means

everything an individual owns and the labor he/she provides

A circular flow model shows

all interactions occur in a market economy

businesses are customers and individuals are producers

When a nation’s economy privatizes it changes from

government ownership to private ownership

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Topic 2: Economic Systems

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Chapter 2: Economic Systems #economics

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Questions 19

Answers

1
In a market economy,the real power in the market place is held by the
government
consumer
producer
seller
2
In a communist economy, workers are
sometimes employed by private firms
sometimes employed by the government
always employed by private firms
always employed by the government or government owned firms
3
Oil, Timber and Water are ______
socialist resources
scarce resources
renewable resources
capital resources
4
When a nation’s economy nationalizes it changes from
public ownership to private ownership
government ownership to private ownership
private ownership to public ownership
government ownership to public ownership
5
With capitalism, investment is driven by
government controlled cooperatives
private parties seeking profits
private parties following government policies
government seeking profits
6
In economic terms, property means
some things an individual owns and the labor he/she provides
some things an individual owns EXCEPT labor he/she provides
everything an individual owns EXCEPT labor he/she provides
everything an individual owns and the labor he/she provides
7
In a communist economy, resources are owned by
individuals or the government
Government
individuals or businesses
Businesses
8
With capitalism, income distribution is determined by market forces
determined by central planners
determined by government policy
that reward underutilization
that reward productivity
9
The government owns some, but not all, factors of production in what system?
Mixed Economy
Command
Socialist
Pure Market
10
A circular flow model shows
some interactions occur in a traditional economy
all interactions occur in a traditional economy
some interactions occur in a market economy
all interactions occur in a market economy
11
Suppliers in a product market are
Individuals
Businesses
Governments
Households
12
Absolute loyalty to the people in power is required by what system?
Socialist
Traditionalist
Market
Authoritarian
13
With voluntary exchange, a buyer and seller agree to do business together
for the mutual benefitof both
for the benefit of neither
only for the benefit of the seller
only for the benefit of the buyer
14
In a factor market
businesses are customers and individuals are producers
Individuals buy goods and services
individuals are customers and businesses are producers
Business sell productive resources
15
How a society uses scarce resources to satisfy people’s unlimited wants is called an economic
Grid
System
Incentive
Utility
16
With capitalism, the allocation of goods and resources is determined by
Market Forces
government policy
traditional customs
centralized planning
17
The nation where government plays the most limited role in the economy is
France
Sweden
United States
North Korea
18
When a nation’s economy privatizes it changes from
private ownership to government ownership
government ownership to private ownership
private ownership to public ownership
public ownership to government ownership
19
What is NOT an advantage of the free market
Freedom
Security
Efficiency
Innovation

Topic 2: Economic Systems Flashcards | StudBud