1.06 – Different Ways to Play – Flashcards
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Which kind of economic system does a capitalist country have?
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free-market
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What is the role of consumers and producers in a free-market system?
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They make the economic decisions.
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According to the circular-flow model, with is most directly provided by producers?
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wages
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Which best explains how a free-market system has a circular flow of influences?
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Consumer decisions affect producers, and producer decisions affect consumers.
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Which best explains why competition is an important part of a free-market system?
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Without competition, people wouldn't have a lot of choices.
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Why are rules protecting private property some of the most important rules in a free-market system?
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Individuals need to own resources in order to make free choices.
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Which best explains why the profit motive often leads to efficiency and innovation?
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The competition to make profit drives producers to eliminate waste.
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Which describes the system in a mixed economy?
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uses both free-market and command principles
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In a command economy, who makes production decisions?
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the government
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Which is not the job of the government in a command economy?
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deciding what consumers buy
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Which kind of economic system does a socialist country have?
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command
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Which economic system leaves production decisions completely up to the producers?
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free-market economy
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According to the circular-flow model, which is something consumers do that influences producers?
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purchase goods and services
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Which results from the fact that a free-market system is based on the free choices of consumers and producers?
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The free-market system has a circular flow of influences.
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Which is the reason why, in a free-market society, the government passes laws against theft, coercion, and fraud?
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protect freedom of choice
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Which best explains why property rights are necessary in a free-market system?
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Property rights allow consumers and producers to make free choices.
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Which best explains market forces?
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properties of a free-market system that determine what the outcomes will be
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Which describes the system in a free-market economy?
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based on decisions by producers and consumers
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In a command economy, who tells producers what and how much to produce?
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government planners
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Which is not the job of the government in a free-market system?
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guaranteeing equality
