Economics Ch.2 Test – Flashcards
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Which of the following is NOT characteristic of a centrally planned economy?
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Each collective or factory sets its own goals
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What is the struggle among various producers for the consumer's business called?
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Competition
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Why does even a free market economy need some government intervention?
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To provide for things that the marketplace does not address
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Which of the following is NOT a key economic question?
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How should it be ensured that goods and services are paid for?
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What does the process of specialization do for an economy?
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It makes it more efficient
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How could the Chinese economy be characterized?
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mixed, but on the side of centrally planned
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What is one of the most important advantages of a free market?
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It encourages growth
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What incentive motivates a manufacturer to sell a product
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Making profits on sales
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Which of the following was a free market philosopher?
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Adam Smith
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Which of the following is characteristic of a traditional economy?
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Children tend to have the same jobs as their parents did
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What is the product market?
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The market in which households purchase the goods and services that firms produce
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What incentive manufacturers have to sell their products?
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Making profits on sales
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In what kind of an economy does the government make all the decisions?
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Centrally planned
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What is the purpose of competition?
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to act as a regulating force in the marketplace
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What is the function of an economic system?
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to produce and distribute goods and services
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Which of the following is a condition that most people would NOT expect the safety net of the government to provide for?
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Low income
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What does the process of specialization do for an economy?
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It makes it more efficient
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How would the economy of Canada be likely to be characterized?
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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?
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It offers a wide variety of goods and services
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Who was the leader that introduced communism and central planning to the former Soviet Union?
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Vladimir Lenin
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The method used by society to produce and distribute goods and services
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Economic system
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One's own personal gain
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Self- interest
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The income people receive for supplying such things as land, labor, or capital
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Factor payments
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A situation in which households purchase the goods and services that firms produce
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product market
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to sell a state run firm to individuals
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privatize
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A large Soviet farm leased from the state to groups of peasant farmers
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collective
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The doctrine that government generally should not intervene in the marketplace
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Laissez Faire
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Level of economic prosperity
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Standard of living
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Government programs that protect people experiencing unfavorable economic conditions
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Safety net
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An economic system that permits the conduct of business with minimal government intervention
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free enterprise
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An expectation that encourages people to behave in a certain way
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incentive
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An economic system that relies on habit, custom, or ritual to decide questions of consumption and production of goods and services
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traditional economy
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A philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society
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socialism
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Requiring strict obedience to someone such as a dictator
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authoritarian
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A range with no clear divisions
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continuum
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A period of change in a economy
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transition
