Please enter something

Economics Chapter 2 Test Answers

question

economic system
answer

way in which a nation uses its resources to satisfy its people’s needs and wants
question

mixed economy
answer

system of combining characteristics of more than one type of economy
question

market
answer

the process of freely exchanging good ans services between buyers and sellers
question

circular flow of income and output
answer

economic model that pictures income as flowing continuously between businesses and consumers
question

capitalism
answer

economics system in which private individuals own the factors of production
question

laissez-faire
answer

economic system in which the government minimizes its interference with the economy
question

free enterprise system
answer

economic system in which individuals own the factors of production and decide how to use them within legal limits; same as capitalism
question

profit incentive
answer

desire to make money that motivates people to produce and sell goods and services
question

competition
answer

rivalry among producers or sellers of similar goods and services to win more businesses
question

economic equity
answer

the attempt to balance an economic policy so that everyone benefits fairly
question

standard of living
answer

the material well-being of an individual, group, or nation, measured by how well their necessities and luxuries are satisfied
question

economic growth
answer

expansion of economy to produce more goods, jobs and wealth
question

regulate
answer

in a mixed economy, the government might______some areas of business by making laws to control or influence that part of the economy
question

available
answer

all societies make decisions about how to use_______resources
question

continual
answer

a market economy experiences______ change as market forces influence the factors of production
question

initiative
answer

an entrepreneur is someone who sees a need and takes the_______by starting a new business
question

incentive
answer

competition is usually the_______, or motivation, for businesses to lower prices
question

expand
answer

if a business is doing well, it might_____or grow larger
question

element
answer

competition is an important_______of capitalism
question

distribute
answer

every business must decide how best to _______ its goods or services to consumers
question

what should be produced?
answer

what basic economic question depends on a nation’s available natural resources?
question

how should it be produced?
answer

what economic question is being answered if an industry replaces some workers with machines?
question

economic decisions are based on customs beliefs and often religion
answer

how does traditional economy answer the basic question, “how should it be produced?
question

answer

what are six important characteristics of free enterprise
question

they limit the role of government mainly to national defense and keeping the peace
answer

what is government’s role in the modern american version of capitalism?
question

it allows each member of society make choices
answer

why is private property important in the american economic system?
question

answer

what are the six goals of free enterprise?
question

they are responsible fore electing government individuals and they have responsibility to use their education in a way that helps the system
answer

what are two examples of individuals’ economic responsibilities in a free-enterprise system?
question

socialists
answer

who did karl marx believe should control the means of production in an economy