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Economic Systems and The Circular Flow Model Flashcards | StudBud
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Economic Systems and The Circular Flow Model
Economic Systems and The Circular Flow Model
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Economic Systems and the Circular Flow Model
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Questions
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1
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 socialist, rather than communist.
The Chinese government is not authoritarian.
2
What “invisible hand” regulates the free market economy?
specialization
competition between firms
incentive and efficiency
competition and self-interest
3
People rely on customs to answer economic questions
economic system
traditional economy
innovation
standard of living
4
What “invisible hand” directs the free market?
specialization
circular flow
competition
incentives and efficiency
5
The doctrine that government generally should not intervene in the marketplace
free enterprise system
mixed economy
laissez-faire
economic transition
6
An economic system in which private individuals or corporations own capital goods
mixed economy
free enterprise system
laissez-faire
economic transition
7
The amount of money a person makes
safety net
income
economic system
innovation
8
The way of living that is normal for a person or community
economic system
standard of living
income
traditional economy
9
Each society answers the 3 economic questions based on
number of factor payments.
degree of economic growth.
values and goals.
desire to achieve economic freedom.
10
Who owns the factors of production?
firms
the market
individuals
households
11
How did heavy industry in Soviet Union avoid the competition that drives a free market economy?
government used profit as an incentive to entrepreneurs.
gov't discouraged competition by choosing price wage&product
the government banned the production of consumer goods.
Farms were not in direct competition with heavy industry.
12
The doctrine that government generally should not intervene in the marketplace
economic transition
mixed economy
laissez-faire
free enterprise system
13
The process of bringing new methods, products, or ideas into use
income
economic system
safety net
innovation
14
A period of change in which an economy moves from one economic system to another
mixed economy
free enterprise system
economic transition
economic freedom
15
Which of the following is characteristic of a centrally planned economy?
The central government enforces laissez-faire policies
The central gov't allows the market to set wages for jobs.
The central government makes all economic decisions.
The central government lets factories set their own goals.
16
The United States economy is a mixed economy
based on centrally planned economy limits gov't intervention
based on free market allows some gov't intervention
based on a free market, allowing no government intervention.
based on traditional economy, allows some gov't intervention
17
The method used by a society to produce and distribute goods and services
innovation
income
economic system
safety net
18
Which of the following is handled by individuals instead of gov't in a free market economy?
public education
mass transit
national defense
investment options
19
Programs that help people facing hard economic times
economic system
income
innovation
safety net
20
Property owned by individuals or companies
private property
mixed economy
economic freedom
government intervention
21
Ways which factors of production are combined determines the answer to what economic question
What will be produced?
How can we provide a safety net?
How will goods be produced?
Who will consume goods?
22
Which of the following is a summary of the three key economic questions?
When, where,& by whom should goods and services be produced?
How, when, & from whom should consumers get what they want?
What goods & services should be produced, how, and for whom?
Who will buy which goods& services, &how much will they pay?
23
What do people supply in return for factor payments?
land, labor, or capital
services, goods, or traditions
innovation, profit, or goods
innovation, labor, or trade
24
A market-based economic system with some government involvement
free enterprise system
laissez-faire
mixed economy
economic transition
25
The selling of state-run firms, which are then allowed to compete in the marketplace
laissez-faire
mixed economy
privatization
free enterprise system
