Chapter 2 Worksheets – Flashcards
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Societies embrace various economic systems to deal with the fundamental problem of _______________.
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scarcity
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The way the 19th century Inuit divided the "spoils of the hunt" demonstrates a ______________ economy.
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traditional
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In a ______________ economy, production questions are answered by the government.
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command
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In a ______________ economy, questions of what, how, and for whom to produce are answered by buying and selling activity of individuals.
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market
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___________________ is a system in which government owns and controls some, but not all, productive resources.
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Socialism
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Which statement describes a disadvantage of a command economy?
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Nothing stops the government from producing things that people don't need or want.
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How is the principle of "There's No Such Thing As A Free Lunch" illustrated in a socialist economy?
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Socialist economies tend to offer extensive government services but have high tax rates.
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Which of the following is a disadvantage of a market economy?
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It sustains a high degree of uncertainty.
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Which of the following states an advantage of a traditional economy?
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Everyone knows exactly what their function is.
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What kind of economy offers uniformity in wages regardless of individual productivity?
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command and socialist economies
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(T/F) Mixed economies can evolve when societies with different kinds of economies interact.
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True
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(T/F) Mixed economies work to the degree that they embrace democracy.
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False
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(T/F) There is always some degree of government involvement in a mixed economy.
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True
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(T/F) Socialist economies include aspects of both command and free-enterprise systems.
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True
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(T/F) Communist countries like North Korea and Cuba are examples of mixed economies.
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False
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Which of the following statements best describes the communist ideal?
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a classless society in which everyone works for the common good
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Why did Sweden move from socialism to a more mixed economy in the 1980s?
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Its citizens objected to the nation's high rate of taxation.
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Which of these is an accurate statement about mixed economies today?
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There are more mixed economies in the world than any other kind.
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Who did Karl Marx believe would be the beneficiaries of socialism?
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workers
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Which of the following describes a move away from capitalism?
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economic reforms following the Great Depression in the United States
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gross domestic product on per person basis
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GDP per capita
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central planning authority in the former Soviet Union
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Gosplan
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fundamental restricting of the Soviet economy, introduced by President Mikhail Gorbachev
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perestroika
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independent Polish labor union founded in 1930 by Lech Walesa
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Solidarity
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independently owned group of Japanese business firms united to regulate competition
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keirestsu
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Which country is an example of a capitalist country?
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Singapore
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What is the main difference between Japanese capitalism and capitalism in the United States?
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Japan's government is highly involved in day-to-day business management.
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What conclusions can be drawn about capitalism from South Korea's economic growth in the late 20th century?
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Capitalism can restore a damaged economy.
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Which of these statements apply to present-day Sweden?
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Its unemployment rates are relatively low.
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Which statement describes why the people in a nation with a command economy might resist a shift to a free market economy?
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People who hold political power are threatened by fundamental changes.
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system in which economic activity is the result of ritual, habit, or custom
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traditional economy
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efficient way of allocating resources and producing and distributing goods and services in a society
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economic system
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economic system in which a central authority makes the major economic decisions
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command economy
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system in which economic activity is driven by supply, demand, and the price system
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market economy
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economic system in which private citizens own and use resources to make a profit
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capitalism
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conversion of state-owned property to individual ownership
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privatization
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comprehensive, centralized economic strategy for achieving rapid industrialization, used by the Soviet Union and China
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Five-Year Plan
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Chinese strategy used to quickly revolutionize industrial agriculture and production
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Great Leap Forward
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economic shift from private ownership to government ownership
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nationalization
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economic sector in which goods and services are sold illegally
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black market
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How are economic transactions shaped in a traditional economy?
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Elders and ancestors make certain that things are done in specific ways.
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Which of the following lists economic systems in order from least to most flexible?
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command, socialism, free market
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Which of the following could raise the cost of production in a command economy?
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a large and inefficient bureaucracy
