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Flashcards in Chapter 6 Test Deck (29):
1

According to Adam Smith, what are the three principal functions of government

-Government is to protect its citizens from foreign aggression
-to protect the rights of its citizens from infringements by others.
-to provide public goods

2

Give an example of a public good

Postal office

3

Why is radical capitalism unscriptural?

It’s denied legitimacy of government

4

In the eighteenth century, what did liberal mean?

People who believed in liberty

5

Measure of quality of life in a country

Standard of living

6

What a persons income could buy

Real income

7

Weakness of capitalism

Greed and materialism

8

Transitional economic system between free markets and governmental ownership

Social democracy

9

The government sells businesses back to private individuals

Privatization

10

Economics system characterized by private ownership and decision making

Capitalism

11

Adam Smith’s ideal economic system

Classic liberal capitalism

12

Government is no longer necessary since everyone is acting in the best interest of others

Communism

13

Economic system that leans towards capitalism and has extremely high taxes

Welfare state

14

Gold and silver in the government’s treasury are what is important

Mercantilism

15

The government takes possession of key industries

Nationalization

16

A central authority controls resources and makes economic decisions

Socialism

17

Private ownership of businesses but with frequent governmental intervention

State capitalism

18

In what year did mercantilism end in America

1776

19

What is not one of the strategies of mercantilism?

Refuse to sell goods and services to foreign nations

20

What does laissez faire mean

Let alone

21

5 points of mercantilism

1. Exploration
2. Trade
3. Domestic manufacturing
4. Colonization
5. Alliances

22

Which of the following is not one of the distinguishing characteristics of a capitalistic economy
A. Workers decide all questions of policy for their particular business.
B. Individuals own a majority of the factors of production.
C. The government does not own the businesses that are cornerstones of the economy
D. Most economic decisions are made by individuals

A.

23

According to Adam Smith, why do the butcher and barker provide our dinner?

Because it is in their own best interest to do so

24

What system do the government not exist

Pure communism

25

When would a social democracy be least likely to assume control?

A shoe factory

26

A _____________ balance of trade is said to exist when a nation sells more goods and services than it purchases

Favorable

27

In his book_____________, Adam Smith refuted the economic policies of mercantilism

Wealth of Nations

28

Why did mercantilism promote colonization

To aquifer new supplies of the factor of production

29

What was the root problem with mercantilism

The misconception that money is wealth