Economic systems Flashcards
(26 cards)
What is an economic system?
An economic system is the method by which goods and services are produced, distributed, and consumed in a society.
What are the four main types of economic systems?
The four main types of economic systems are traditional, command, market, and mixed economies.
True or False: A traditional economy relies on customs and traditions.
True
Fill in the blank: In a _____ economy, the government makes all the decisions regarding the production and distribution of goods.
command
What characterizes a market economy?
A market economy is characterized by supply and demand determining the prices of goods and services.
Which type of economy combines elements of both market and command economies?
mixed economy
True or False: In a command economy, individual choices have a significant impact on the economy.
False
What is the primary goal of a traditional economy?
The primary goal of a traditional economy is to maintain the way of life and ensure survival through subsistence farming and barter.
What is a major disadvantage of a command economy?
A major disadvantage of a command economy is the lack of efficiency and innovation due to limited competition.
Multiple choice: Which economic system is most associated with capitalism? A) Command B) Traditional C) Market D) Mixed
C) Market
What role do consumers play in a market economy?
Consumers influence production decisions by their purchasing choices.
Fill in the blank: A _____ economy prioritizes private ownership and free markets.
market
True or False: In a mixed economy, government intervention is absent.
False
What is the significance of supply and demand in a market economy?
Supply and demand determine the prices and availability of goods and services.
What type of economic system is often found in developing countries?
traditional economy
Multiple choice: Which of the following is NOT a characteristic of a command economy? A) Central planning B) Government ownership C) Market-driven pricing D) Resource allocation by government
C) Market-driven pricing
What does ‘economic efficiency’ mean in the context of economic systems?
Economic efficiency refers to the optimal production and allocation of resources to maximize output and minimize waste.
Fill in the blank: The _____ system allows for private ownership of businesses with minimal government interference.
market
True or False: Economic systems can evolve over time.
True
What is a primary challenge faced by mixed economies?
A primary challenge is balancing government intervention with free market principles.
What is the role of the government in a command economy?
The government makes all decisions regarding production, distribution, and allocation of resources.
Multiple choice: Which of the following best describes a market economy? A) Government-directed B) Consumer-driven C) Tradition-based D) Resource-controlled
B) Consumer-driven
What is an example of a country with a traditional economy?
An example of a country with a traditional economy is Bhutan.
Fill in the blank: A _____ economy features both private enterprise and government regulation.
mixed
