Economic Systems Test

Question 0

Command

Answer 0

Government makes all economic decisions and owns all property.

Question 1

Traditional

Answer 1

Decision are based on customs and beliefs. ( do what ancestors did)

Question 2

Market

Answer 2

Economic decisions are based on free enterprise. Gov doesn’t tell businesses what to make ( based on prices and profits)

Question 3

Mixed

Answer 3

Market + Command = mixed

Question 4

Traditional ex

Answer 4

Rural parts of India, Inuit tribe

Question 5

Command ex

Answer 5

Cuba

Question 6

Market ex

Answer 6

United States and Australia

Question 7

Mixed ex

Answer 7

United Kingdom, Russia

Question 8

Most democratic systems have which type of economic system?

Answer 8

Mixed

Question 9

Most communist countries have which type of economic system?

Answer 9

Command

Question 10

What are the 3 basic questions that every economic system must answer?

Answer 10

What to produce? How to produce? For whom to produce?

Question 11

Define free enterprise. Which system is this found in?

Answer 11

Competition between businesses and market

Question 12

What is bartering? Which economic system uses bartering to trade goods?

Answer 12

Trading without using money, traditional

Question 13

Which economic system is based on individual choice?

Answer 13

Market

Question 14

Which European countries are the closest to having a pure Market economy?

Answer 14

Uk, Germany, Russia

Question 15

Tariff?

Answer 15

Taxes on imported goods

Question 16

Quota

Answer 16

Limits on the quantity of goods imported.

Question 17

Embargo?

Answer 17

Complete trade block ( mostly for political purpose)

Question 18

What are 3 examples of physical trade barriers in Europe?

Answer 18

Alps, Black Forest, and Pyrenees

Question 19

Human Capitol?

Answer 19

Skills, talents, abilities, education of people within a workforce

Computer skills, music, acting, technology, etc.

Question 20

Capitol Goods?

Answer 20

Actual goods produced in a country

Desk, chair, clock, computer, pencil, shoes, etc.

Question 21

Natural Resources?

Answer 21

Gifts of nature – renewal and non-renewable

Iron ore, petroleum, minerals, etc.

Question 22

Natural Resources

Answer 22

Gifts of nature – renewal and non-renewable

Iron ore, petroleum, minerals, etc.

Question 23

Entrepreneurship?

Answer 23

People who invent something new, take something and improve it, or start a new business

Steve Jobs, Bill Gates, etc.

Question 24

How do Russia’s harsh climate, size, and few navigable rivers affect its economic development?

Answer 24

Natural resources are hard to extract, so economic growth depends on some items that have to be imported.

Question 25

What does “scarcity” mean?

Answer 25

There are limited supply of a resource.

Question 26

Describe importing and exporting.

Answer 26

Importing: bringing in goods from a forgiven country
Exporting: shipping out goods to another country

Question 27

Russia’s economy has moved away from command and more towards Market since 1991- why?

Answer 27

The Soviet Union collapsed and a democratic government replaced communism. This new government used a mixed economic system instead of command.

Question 28

What do economic systems of the Untied Kingdom, Germany, and Russia have in common?

Answer 28

Mixed ( close to market)

Question 29

Define forgiven exchange.

Answer 29

The different types of currency in countries. (Foreign currency)

Question 30

What does international trade require a system for exchanging currencies?

Answer 30

A system is needed for calculating the value of one currency in terms of another. This is essential for trade to ensure that both countries involved in trading receive a fair trade.