Economic Systems

Question 1

What are the two basic types of economics in the world today?

Answer 1

Microeconomic

Macroeconomics

Question 2

___ is the study of individuals, families, and businesses in the economy

Answer 2

Microeconomics

Question 3

___ is the study of the economy as a whole and is concerned with large-scale economic activity

Answer 3

Macroeconomics

Question 4

___ studies economic behavior as it is

Answer 4

Positive economics

Question 5

___ involves judgements of what economic behavior ought to be

Answer 5

Normative economics

Question 6

An ___ is the way a society uses its scarce resources to satisfy its peoples unlimited wants

Answer 6

economic system

Question 7

What are the three economic systems?

Answer 7

Traditional
Command
Market

Question 8

___ is an economic system in which families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down from generation to generation

Answer 8

Traditional economy

Question 9

What is the one goal of these societies?

Answer 9

Survival

Question 10

A ___ is where the government decides what goods and services will be produced, how they will be produced, and how they will be distributed

Answer 10

command economy

Question 11

___ consider the resources and needs of the country and allocate those resources according to their judgment

Answer 11

government officials

Question 12

___ is based on individual choice, not government directives

Answer 12

market economy

Question 13

___ and ___ drive the economy

Answer 13

consumers and producers

Question 14

___ decide what goods or services they will offer

Answer 14

producers

Question 15

Individuals act in their own self-interest when they make ___ choices

Answer 15

economic

Question 16

No other economist has had as much influence as ___

Answer 16

Adam Smith

Question 17

Smith was born in ___, in ___

Answer 17

Scotland in 1723

Question 18

What three things did Smith study and later taught

Answer 18

literature, logic, and moral philosophy

Question 19

In the ___, Smith challenged the ideas of mercantilism being economically sound

Answer 19

The Wealth of Nations

Question 20

___ is a system by which the goverment of the homeland being trade with its colonies

Answer 20

Mercantilism

Question 21

A nation would be wealthier if it engaged in ___

Answer 21

free trade

Question 22

He reasoned that people behave in ways that satisfy their economic ___

Answer 22

self-interest

Question 23

An “___” guides the marketplace

Answer 23

invisible hand

Question 24

The “invisible hand” as well as other principles outlined the Wealth of Nations became the foundation of modern ___

Answer 24

economic theory

Question 25

A system in which the society's leader, usually members of the central government, make all economic decisions is called a ___ economy

Answer 25

centrally planned

Question 26

Modern societies that hae adopted command economics have done so largely because of the influence of ___

Answer 26

Karl Marx

Question 27

Marx predicted that in time, the workers would overthrow this system and transfer ownership of the factories to ___

Answer 27

public hands

Question 28

___ is an economic system in which the government owns some or all of the factors of production

Answer 28

Socialism

Question 29

___ is an economic system in which the government owns all the factors of production and there is little or no political freedon

Answer 29

Communism

Question 30

Typically communism will become ___

Answer 30

authoritarian

Question 31

A ___ system require absolute obedience to those in power

Answer 31

authoritarian

Question 32

___ is established through the democratic political process rather than through the violent overthrow of the government

Answer 32

Democratic socialism

Question 33

In this form of socialism, the ___ owns the basic industries, but rather industries are privately owned

Answer 33

Government

Question 34

Marx was born in what is now ___ in ___

Answer 34

Germany in 1818

Question 35

Marx grew up in ___ comfort

Answer 35

middle-class

Question 36

During Marx's travels, he met ___, the son of a factory worker

Answer 36

Friedrich Engels

Question 37

Marx concluded that the ___ had created a system of wage slavery

Answer 37

Industrial Revolution

Question 38

The whole industrial system, Marx reasoned, was based on the ___ of workers

Answer 38

exploitation

Question 39

Marx, assisted Engels, laid out ideas of worker overthrow in The ___

Answer 39

Communist Manifesto

Question 40

Communist Manifesto was in what year?

Answer 40

1848

Question 41

___ still has economy with mostly command elements

Answer 41

North Korea

Question 42

Self interested behavior is behind two features of a market economy, what are they?

Answer 42

Private property rights and market

Question 43

___ are the rights of individuals and group to own businesses and resources

Answer 43

Private Property rights

Question 44

___ is any place where people buy and sell goods and services

Answer 44

market

Question 45

___ is vital to any single sale or evantage

Answer 45

Clear ownership

Question 46

___ are necessary to make markets properly

Answer 46

Private property rights

Question 47

The principle that the government should not interfere in the economy is called ___

Answer 47

laissez faire

Question 48

The concept of laissez faire if often paired with ___

Answer 48

capitalism

Question 49

___ is an economic system that is based on private ownership of the factors of production

Answer 49

Capitalism

Question 50

___ is a market economy in its pure form

Answer 50

Laissez faire capitalism

Question 51

___ is a trade in which both traders believe that what they are getting is worth more than what they are giving up

Answer 51

voluntary exchange

Question 52

___ guides voluntary exchanges

Answer 52

self- interested

Question 53

___ is considered a financial gain from a business transaction

Answer 53

profit

Question 54

___ is the effort of two or more people , acting independently, to get the business of others by offering the best deal

Answer 54

Competition

Question 55

___ is the idea that because are free to purchase what they refuse products they do not, they have the ultimate control over what is produced

Answer 55

Consumer sovereignty

Question 56

___ acts as a control on self-interested behavior, guiding the market toward a balance between higher ___ and lower ___

Answer 56

Competition value prices

Question 57

___ is a situation in which people concentrated their efforts in the areas in which they have advantage

Answer 57

Specialization

Question 58

___ removes the need for households to be self-sufficient, and ___ allow households to trade for what they need

Answer 58

Specialization | Markets

Question 59

Specialization, then, leads to higher ___ yet lower ___ products

Answer 59

quality | priced

Question 60

___ is a tool that economists use to understand how market economies operate

Answer 60

The circular flow model

Question 61

The model represents the two key economic decisions markers in a market economy...what are they?

Answer 61

households | businesses

Question 62

The market for goods and services is called the ___

Answer 62

product market

Question 63

The supplies of the product market are ___

Answer 63

businesses

Question 64

The ___ is the market for the factors of production

Answer 64

factor market

Question 65

Individuals own all the ___

Answer 65

factors of production

Question 66

In the factor market, businesses are the ___ and individuals are the ___

Answer 66

customers | producers

Question 67

In a ___ the economic good of the individuals is the primary focus

Answer 67

pure market economy

Question 68

___ is the most common type of economic system today

Answer 68

mixed economy

Question 69

___ is an economy that has elements of traditional, command, and market systems

Answer 69

mixed economy

Question 70

In the United States, the ___ economy dominates

Answer 70

market

Question 71

France tried to fins a middle ground between ___ and ___

Answer 71

socialism and capitalism

Question 72

Even though there are traditional and command elements, the driving forces of the US economy are such features as ___ and ___

Answer 72

private ownership and markets

Question 73

___, while also a mixed economy, has much greater government involvement

Answer 73

Sweden

Question 74

The Swedish government and government-related organizations own ___ of the Swedish companies

Answer 74

one-third

Question 75

Swedish citizens receive "___" social benefits

Answer 75

cradle to grave

Question 76

One way to help privative an industry is to open it up to ___

Answer 76

foreign investors

Question 77

___ refers to all the economies interactions that cross international boundaries

Answer 77

global economy