Chapter 2 Review

Made by students

Section 1—Economic Systems

Made by students

1. Which of the following does not discourage new ideas?

A. Command B. Traditional C. Market D. All of them do

2. Which of the following best describes a command economy?

A. Found in the USA B. Individuals have little choice C. Elders make the decisions D. All of the above

3. Which type of economic system does America have?

A. Market B. The hott! System C. Command D. Traditional

4. What are the three economic systems?

A. Trade, commerce and market B. Trade, command and movement C. Traditional, command and market D. None of the above

5. Which economic system does not have the disadvantage of discouraging new ideas?

A. Traditional B. Command C. Market D. None of the above

6. Which economic system only rewards productive resources?

A. Traditional B. Command C. Market D. All of the above

7. Which is not an advantage for the command economy?

A. Stable and predictable life B. Lacks government interference C. Capable of dramatic change in a short

time D. Public services available for little or no

cost

8. What economic system is found in South Korea?

A. Traditional B. Command C. Market D. Both A and B

9. What economic system is found in tribes like the Australian Aborigines and Inuits?

A. Traditional B. Command C. Market D. Free enterprise

10. Which of the following is not one of the three economic systems?

A. Traditional B. Command C. Autocratic D. Market

11. In the market economy…

A. People face uncertainty as a result of competition

B. There is lack of gov’t interference C. Public services are available for little or

no cost D. Both A and B

12. Which system pertains to the elders making the decisions?

A. Command B. Traditional C. Market D. Government

13. In which system can markets fail?

A. Traditional B. Command C. Market D. Stocks

14. Which country has a command economy?

A. China B. Russia C. North Korea D. South Korea

15. Which system has decentralized decision making?

A. Traditional B. Command C. Market D. All of the above

16. Which of the following is not a factor for a market economy?

A. Capable of dramatic change in a short amount of time

B. Individual freedom C. High degree of consumer satisfaction D. Lack of gov’t inference

17. Which country has a market economy?

A. Japan B. USA C. South Korea D. All of the above

18. A traditional economy

A. Is decentralized B. Is capable of dramatic change C. Stems from ritual and habit D. None of the above

19. What is an example of a traditional economic system?

A. Central authority; Cuba B. Consumer satisfaction; United States C. Ritualistic; Aborigines D. Cybertron; Optimis Prime

20. What country has a command economy?

A. USA B. Italy C. England D. Cuba

21. Which system is considered the most prosperous?

A. Traditional B. Command C. Market D. Control

22. What is an advantage of a command economy?

A. Public services are provided for everyone B. A variety of goods are produced C. The markets may fail D. A lack of gov’t interference

23. Which system is controlled by a central authority?

A. Traditional B. Command C. Market D. None of the above

24. Who plays the biggest role in the market economy?

A. The government B. Consumers C. Warren Buffet D. Bill Gates

Section 2—Economic Goals of the United States

Made by students

25. The “American Dream” is defined as

A. Having a fast car and a mansion B. Growing up penniless and becoming a

millionaire C. Having a more prosperous life then one’s

parents D. Getting rich through sports

26. What is inflation?

A. A rise in the general level of prices B. When you blow up a balloon C. A fixed income D. Economic growth

27. What unemployment rate do we want for full employment?

A. 6% B. 5% C. 8% D. 2%

28. It is illegal to discriminate against

A. Gender B. Age C. Race D. All of the above

29. Which of the following is not one of the seven economic goals?

A. Economic freedom B. Economic security C. Full employment D. No one goes hungry

30. It is illegal to discriminate on the following except?

A. Gender B. Age C. Race D. Criminal record

31. Economic freedom

A. The gov’t chooses your job B. You do what your dad does C. There is no such thing D. People can choose for themselves

32. What can you choose with economic freedom?

A. How much you get paid B. Where you work and who you vote for C. Who you marry D. Who dies

33. Which best describes economic equity?

A. Businesses choose where and how B. Equal pay for equal work C. Inflation D. Only A and C

34. It is illegal to discriminate based on

A. Hair color B. Weight C. Religion D. Shoe size

35. Which of the following goals is needed so people can have more goods and services?

A. Price stability B. Economic security C. Economic freedom D. Economic growth

36. What doesn’t increase even though prices do?

A. Salary B. Income C. Fixed income D. budget

37. Full employment means that everyone that ___ a job should have the right to earn ____.

A. Needs; an income B. Wants; an income C. Wants; social security D. Needs; social security

38. Economic Efficiency means

A. All people have a job B. The four factors are used wisely C. Every cookie that is baked is eaten D. All of the above

39. What is the economic security for retirement?

A. Medicare B. Unemployment compensation C. Social security D. Both A and C

40. What does price stability mean?

A. Having stable prices makes it easier to budget

B. Keeping everything equal C. Having prices go up and down D. Both A and C

41. Which of the following is not an economic goal?

A. Economic freedom B. Economic inflation C. Economic equity D. Economic security

42. Which economic goal is considered to protect people from discrimination?

A. Economic equity B. Economic security C. Economic efficiency D. Economic freedom

43. What factors of production are wisely used for economic efficiency?

A. Land and labor B. Capital C. Entrepreneur D. All of the above

44. Which of the following is not a part of economic security?

A. Insurance B. Unemployment compensation C. Social security D. All are parts of economic security

45. It is legal to discriminate against

A. Race B. Stinky breath C. Age D. Gender

Section 3—Characteristics of a Market economy and the government’s role

Made by students

46. Which characteristic of a market economy is the struggle among sellers to attract customers?

A. Protector B. Competition C. Promoter of national goals D. Profit motive

47. Which of the following is not a characteristic of a market economy?

A. Economic freedom B. Involuntary exchange C. Voluntary exchange D. Private property rights

48. What role of gov’t requires preserving competition?

A. Regulator B. Protector C. Promoter D. Competition

49. Which is not part of the four roles of gov’t?

A. Protector B. Creator C. Regulator D. Promoter of the national goals

50. Which of the following is a characteristic of a market economy?

A. Stable B. Competition C. Forced exchange D. Economic force

51. What is the incentive for people to work harder?

A. Competition B. Profit motive C. Private property rights D. Profit

52. Which is not a characteristic of a market economy?

A. Voluntary exchange B. Profit motive C. Competition D. Economic security

53. The gov’t role of protector…

A. Enforces laws B. Protects against false advertising C. Protects against unsafe food and goods D. All of the above

54. Which role of gov’t preserves competition?

A. Protector B. Provider and consumer C. Promoter of national goals D. Regulator

55. What is an income that does not rise even though prices do?

A. Inflation B. Salary C. Fixed income D. Fixed raise

56. What is a market economy also referred as?

A. Socialist B. Communist C. Capitalist D. marketman

57. Freedom to choose is

A. Voluntary exchange B. Profit motive C. Competition D. Economic freedom

58. Which is a role of the gov’t?

A. Regulator B. Equality C. Be nice D. Follow rules or die

59. A regulator

A. Enforces laws B. Preserves competition C. Provides economic freedom D. None of the above

60. Which of the following isn’t one of the four roles of gov’t?

A. Protector B. Promoter of national goals C. Boss of private industry D. Regulator

61. Competition is created when

A. Businesses struggle to attract consumers B. The government makes it C. Everyone else fails D. Beauty pageants make it

62. What is better off at the end then at the beginning?

A. Profit motive B. Competition C. Profit D. Freedom

63. The US is officially a

A. Free enterprise B. Modified free enterprise C. Pure capitalist D. Market with a touch of traditional

64. A voluntary exchange

A. Needs approval by the gov’t B. Is illegal C. Does not exist D. Occurs when buyers and sellers freely

make transactions

65. A market economy may also be referred to as

A. Capitalist B. Mixed free enterprise C. Free enterprise D. All of the above

66. What characteristic of the market economy is it when people may own and control their possessions as they wish?

A. Voluntary exchange B. Private property rights C. Economic freedom D. Profit motive