Chapter 2 - Economic Systems

Question 1

What are the four economic systems/economies in the world?

Answer 1

Traditional
Command
Marky
Mixed

Question 2

What is a traditional economy?

Answer 2

An economic system in which production, investment, prices, and incomes are determined by rituals, habits, customs, and beliefs

Question 3

What groups of people normally use traditional economies?

Answer 3

Rural and farm based countries. Indigenous people

Question 4

What are the advantages of a tradition economy?

Answer 4

Everyone knows what, how, and for whom to produce

Question 5

What are the disadvantages of a traditional economy?

Answer 5

Tends to discourage new ideas and new ways of doing things. Also it creates a lack of progress.

Question 6

What is a command economy?

Answer 6

An economic system in which production, investment, prices, and incomes are determined by a central authority. (King, dictator, state, government,etc.)

Question 7

In a command economy who decides the what, how, and for whom?

Answer 7

The central authority

Question 8

What is socialism?

Answer 8

A modern liberal version of the command economy
An economic and political system in which the government owns some but not all the factors of production and makes most/all of the economic decisions.

Question 9

What are some examples of a command economy?

Answer 9

North Korea, Cuba, Venezuela, and Vietnam

Question 10

What are the advantages of a command economy?

Answer 10

It can change direction drastically, allows people to receive some services they otherwise may not be bale to afford—Healthcare.

Question 11

What are some disadvantages of a command economy?

Answer 11

Leaders provide for themselves at the expense of the general population. The loss of independent freedom to choose and a low quality and quantity of goods (shortages). Tax rates are high.

Question 12

What is a market economy?

Answer 12

An economic system in which production, investment, prices, and income are determined and controlled by buyers and sellers (individuals) freely conducting business.

Question 13

Who determines the what, how, and for whom in a market economy?

Answer 13

The consumers- people

Question 14

What is the most powerful engine generating wealth the world has ever seen?

Answer 14

Capitalism

Question 15

What are examples of a market economy?

Answer 15

Usa, australia, canada, great britain, etc

Question 16

What are the advantages of a market economy?

Answer 16

Individual freedom, adjusts gradually to change over time, relatively small degree of government interference, and provides a wide variety of good and services, etc.

Question 17

What are some of the disadvantages of a market economy?

Answer 17

Doesn’t provide for everybody and can have a high degree of uncertainty

Question 18

What is a mixed economy?

Answer 18

An economic system blending elements of market, command, and traditional economies.

Question 19

Wha are the advantages of a mixed economy?

Answer 19

Can take on the advantages of the other economies

Question 20

What are some of the disadvantages of a mixed economy?

Answer 20

Can also take on the disadvantages of the other economies

Question 21

What are some of the examples of a mixed economy?

Answer 21

Much of the Western Hemisphere— USA and Scandinavian countries

Question 22

What is communism and who was its founder?

Answer 22

Karl Marx, and an ideological and social/political movement whose aim is to set yo a better version of society.

Question 23

What is a communism society (in Karl Marx’s viewpoint) based on?

Answer 23

the common ownership of the factors of production and would not rely on social classes or money.