Chap 2 Economics

the nationalization of major industries in Hugo Chavez's Venezuela

Which of the following describes a move away from capitalism?

People must adjust to the costs and risks that are part of capitalism.

Which of the following is a cause of struggle in the process of privatization?

It sustains a high degree of uncertainty

Which of the following is a disadvantage of a market economy?

All products are managed by the government

Which of the following is a feature of a command economy that distinguishes it from a socialist economy?

Everyone knows exactly what their function is

Which of the following states an advantage of a traditional economy?

a classless society in which everyone works for the common good

Which of the statements best describes the communist ideal?

North Korea

Which of these countries has an economy most similar to that of the former Soviet Union?

command economy and capitalism

Which of these economic systems have the least in common?

People become unhappy with aspects of their current economy.

Which of these helps explain why mixed economies develop?

There are more mixed economies in the world than any other kind.

Which of these is an accurate statement about mixed economies today?

the Great Depression

Which of these is the most striking example of the costs and risks of pure capitalism?

Its unemployment rate and GDP per capita are relatively high.

Which of these statements apply to present-day Sweden?

New ways of doing things are discouraged.

Which of these statements describes a disadvantage of a traditional economy?

Major economic decisions are made by individuals, not for them.

Which of these statements is descriptive of a market economy?

Nothing stops the government from producing things that people don't need or want.

Which statement describes a disadvantage of a command economy?

People who hold political power are threatened by fundamental changes.

Which statement describes why certain people in a nation with a command economy might resist a shift to a free market economy?

workers

Who did Karl Marx believe would be the beneficiaries of socialism?

Its citizens objected to the nation's high rate of taxation.

Why did Sweden move from socialism to a more mixed economy in the 1980s?

socialism

_______ is a system in which government owns and controls some, but not all, productive resources.

Gosplan

central planning authority in the former Soviet Union

voucher

certificate used to purchase government-owned property during privatization

communism

economic and political system in which factors of production are owned and directed by the state

collectivization

forced common ownership of factors of production

perestroika

fundamental restructuring of the Soviet economy, introduced by President Mikhail Gorbachev

GDP

gross domestic product on a per person basis

solidarity

independent Polish labor union founded in 1980 by Lech Walesa

keiretsu

independently owned group of Japanese business firms united to regulate competition

market

mechanism through which buyers and sellers of an economic product or service come together

population density

number of people per square mile of land area

capital-intensive

requiring large amounts of investment in equipment in relation to labor

European Union (EU)

successor of the European Coal and Steel Community, established in 1993

socialism

system in which government owns and controls some factors of production

mixed economy

system that has some combination of traditional, command, and market economies

Great Depression

worst period of economic decline in U.S. history, lasting from approximately 1929 to 1939

False

Communist countries like North Korea and Cuba are examples of mixed economies.

Socialist economies tend to offer extensive government services but have high tax rates.

How is the principle of "There's No Such Thing As A Free Lunch" illustrated in a socialist economy?

command

In a ______ economy, production questions are answered by the government.

market

In a ______ economy, questions of what, how, and for whom to produce are answered by the buying and selling activity of individuals.

People are more likely to be productive when it benefits them personally.

In a transitioning economy, why would privatization tend to raise a nation's overall standard of living?

a socialist economy

In which of these systems is the government most likely to provide people with goods and services they could not otherwise afford?

True

Mixed economies can evolve when societies with different kinds of economies interact.

False

Mixed economies work to the degree that they embrace democracy.

True

Socialist economies include aspects of both command and free-enterprise systems.

scarcity

Societies embrace various economic systems to deal with the fundamental problem of

traditional

The way the 19th-century Inuit divided the "spoils of the hunt" demonstrates a ______________ economy.

True

There is always some degree of government involvement in a mixed economy.

Capitalism can restore a damaged economy.

What conclusion can be drawn about capitalism from South Korea's economic growth in the late 20th century?

Japan's government is highly involved in day-to-day business management.

What is the main difference between Japanese capitalism and capitalism in the United States?

command and socialist economies

What kind of economy offers uniformity in wages regardless of individual productivity?

Singapore

Which country is an example of a capitalist country?