Economy: Chapter 2 – Flashcards
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Which is characteristic of a traditional economy? Communities tend to be fast-growing. They are usually based on light industrial production. They have a high standard of living. Children tend to have the same jobs as their parents did.
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Children tend to have the same jobs as their parents did.
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Why does even a free market economy need some government intervention? to provide for things that the marketplace does not address to ensure that the government has the freedom to tax as necessary to make sure that the government can fulfill its needs for military personnel so that the government has some control over factor resources
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to provide for things that the marketplace does not address
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Select the term: One's own personal gain standard of living privatize economic system self-interest factor payments
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self-interest
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What is the function of an economic system? to make sure all people have equal access to goods to produce and distribute goods and services to give all producers the same access to consumers to make sure people are paid for their labor
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to produce and distribute goods and services
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What does the process of specialization do for an economy? It makes it more efficient. It eliminates unemployment. It fosters competition. It makes it easier to control.
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It makes it more efficient.
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Interpreting a Circular Flow Diagram: What does the complete diagram represent, the bottom half and the top half put together? business cycle in general the factor market circular flow in a free market economy household payments for the factors of production
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circular flow in a free market economy
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Select the term: The income people receive for supplying such things as land, labor, or capital standard of living privatize economic system self-interest factor payments
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factor payments
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What is the purpose of competition? to act as a regulating force in the marketplace to cause producers to attempt to put each other out of business to cause buyers to have to be careful about spending their money to act as a motivating force behind the free market
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to act as a regulating force in the marketplace
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What is the key incentive that motivates a manufacturer to sell its products? making profits on sales pleasing the consumer putting others out of business popularity of the product
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making profits on sales
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Select the term: A philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society free enterprise traditional economy incentive safety net socialism
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socialism
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Which is not a key economic question? What goods and services should be produced? How should these goods and services be produced? Who consumes these goods and services? How should these goods and services be paid for?
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How should these goods and services be paid for?
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Select the term: Government programs that protect people experiencing unfavorable economic conditions free enterprise traditional economy incentive safety net socialism
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safety net
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Select the term: To sell a state-run firm to individuals standard of living privatize economic system self-interest factor payments
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privatize
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Which is not characteristic of a centrally planned economy? The central government owns all land and capital. The central government makes all economic decisions. Each collective or factory sets its own goals. Each person is assigned a job.
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Each collective or factory sets its own goals.
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Select the term: Level of economic prosperity standard of living privatize economic system self-interest factor payments
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standard of living
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How can the economy of China be characterized? free market centrally planned mixed, but on the side of centrally planned mixed, but on the side of free market
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mixed, but on the side of centrally planned
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What does the upper half of the diagram represent—the part marked 1? the product market the factor market the government flow of resources the flow of income
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the product market
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Select the term: An expectation that encourages people to behave in a certain way free enterprise traditional economy incentive safety net socialism
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incentive
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Select the term: The method used by society to produce and distribute goods and services standard of living privatize economic system self-interest factor payments
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economic system
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Select the term: An economic system that permits the conduct of business with minimal government intervention free enterprise traditional economy incentive safety net socialism
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free enterprise
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How can the economy of Canada be characterized? free market centrally planned mixed, but on the side of centrally planned mixed, but on the side of free market
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mixed, but on the side of free market
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What is an important advantage of a free market? It does not change unless the government directs it. It offers a wide variety of goods and services. It is easy to regulate. It protects the less fortunate.
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It offers a wide variety of goods and services.
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Select the term: An economic system that relies on habit, custom, or ritual to decide questions of consumption and production of goods and services free enterprise traditional economy incentive safety net socialism
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traditional economy
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Which condition listed is the one that most people do not expect the safety net programs of government to provide for? injuries joblessness natural disasters low income
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low income
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The struggle among various producers for the consumer's business called ____________ . socialism competition incentive self-regulation
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competition
