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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 encourage free trade
to strengthen American culture
to regulate the business cycle
to promote innovation
2
The ________ system is another name for a market economy.
Centrally Planned
Socialist
Command
Free Enterprise
3
Which of the following philosophers recommended the free market
Adam Smith
Karl Marx
Friedrich Engels
Vladimir Lenin
4
What is one of the most important principles of economics?
distribution
scarcity
money
globalization
5
What is one way the Constitution protects the free enterprise system?
It recognizes private property rights.
It prevents the government from making contracts.
It establishes the principle of voluntary exchange.
It spells out the rights of consumers.
6
Traditional economies usually
avoid change
adapt to innovation
7
What does the process of specialization do for an economy?
It makes labor easier to control.
It eliminates unemployment.
It fosters competition.
It makes production more efficient.
8
A person who believes that wealth should be evenly distributed throughout society is
an entrepreneur.
a capitalist.
a communist.
a socialist.
9
Social Security withheld from your paycheck is for
health insurance for the elderly and poor
cash transfers for the elderly and poor
401K retirement account
cash transfers for those hurt on the job
10
How will consumers react to the incentive of a higher price on a good or service?
negative, buy less products
negative, buy more products
remain stable
positive, buy more products
11
In a free enterprise system, who decides what will be produced?
firms
consumer
producers
government
12
What is one way the government might try to promote economic growth?
reduce prices
raise taxes
produce more goods
increase spending
13
Roads and bridges are examples of how government provides
public goods
in kind benefits
grants
market failure
14
Solar power and wind power are examples of what kind of resources?
renewable
labor
nonrenewable
capital
15
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.
16
In a command economy, the government regulates how goods and services are distributed.
False
True
17
To improve its standard of living, a nation’s economy must
reach economic equity
grow throw innovation
allow the government to make decisions
remain stable
18
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
19
Which of the following is considered a "cash transfer"
grants
section 8
unemployment compensation
food stamps
20
What do people supply in return for factor payments?
land, labor, or capital
services, goods, or traditions
innovation, labor, or trade
innovation, profit, or goods
21
Which are the government’s three goals for promoting economic strength?
steady growth, high prices, and innovation
high employment, steady growth, and stability
high employment, increased spending, and low taxes
low unemployment, low prices, and low taxes
22
What is the government’s role in controlling externalities in the American economy?
limit all externalities to stop market failures.
limit positive and encourage negative externalities.
encourage positive and limit negative externalities
encourage all externalities to increase competition
23
the level of economic prosperity
standard of living
poverty threshold
traditional economy
specialization
24
Competition is a driving force in a free enterprise economy.
False
True
25
What is the profit motive?
opportunity for success
money that a business makes
exchange of goods
incentive to make money
26
Which is a positive externality of a new high school?
a raise in property taxes
more noise in the neighborhood
student purchases at nearby stores
more traffic on the roads
27
Which of the following describes the physical flow from households to firms?
wages, rent, dividends
factors of production
consumer expenditures
goods and services
28
Health insurance for the elderly, the poor, and the disabled is provided by
Worker’s Compensation.
Medicare and Medicaid.
TANF
the unemployment insurance program.
29
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
30
a system to protect people experiencing unfavorable economic conditions
safety nets
soul glo
market exchange
factor payments
