Smartbook Chapter 2

The Japanese keiretsu is a Multiple choice question. process developed by Japan's Ministry of International Trade and Industry to identify promising export markets. complex web of interlocking businesses that are organized around a core bank. form of capital-intensive production needed to make up for a small labor force.

complex web of interlocking businesses that are organized around a core bank.

The role of a bureaucracy in a command economy is to

develop production quotas for their factories.

What are the advantages of a market economy? Multiple select question. The ability of leaders to direct change A high degree of consumer satisfaction Decentralized decision making A wide variety of goods and services A high degree of individual freedom

A high degree of consumer satisfaction Decentralized decision making A wide variety of goods and services A high degree of individual freedom

Prior to the 1980s, it could be said that China's economy Multiple choice question. was based on markets and capitalism. relied extensively on traditionalism rather than markets or central planning. followed the Soviet Union's model of using five-year plans to guide output.

followed the Soviet Union's model of using five-year plans to guide output.

What changes has Sweden made to spur its economic growth? Multiple select question. It has increased the public sector so that fewer taxes are necessary. It has made reductions in its expensive social welfare system. It has privatized government-owned businesses.

It has made reductions in its expensive social welfare system. It has privatized government-owned businesses.

What disadvantage(s) does a traditional economy have? Multiple select question. A lack of progress that leads to stagnation The tendency to discourage new ideas and ways of doing things The uncertainty of which duties to perform A lower standard of living than is found in other economic systems

A lack of progress that leads to stagnation The tendency to discourage new ideas and ways of doing things A lower standard of living than is found in other economic systems

Select all that apply What costs must transitioning countries usually face before they may enjoy the benefits of capitalism? Multiple select question. Alternating periods of boom and bust Brief periods of social unrest Stretches of high joblessness Loss of economic decision-making power

Alternating periods of boom and bust Brief periods of social unrest Stretches of high joblessness

Select all that apply Why do many northern European countries have elements of socialism? Multiple select question. Because their citizens want it that way and have voted for it Because their citizens believe socialism is coming back into popularity Because their citizens have a strong sense of responsibility toward one another

Because their citizens want it that way and have voted for it Because their citizens have a strong sense of responsibility toward one another

The country of , the world leader in industrial robots, is also widely known for having an extremely dedicated workforce.

Blank 1: Japan

The loss of political power was one of the problems faced by leaders of communist countries when they tried to transition their economies to

Blank 1: capitalism

The predominant world economic trend during the late 1900s and early 2000s was a gradual shift toward

Blank 1: capitalism

Although the Japanese keiretsu protects its companies against hostile takeovers, it also reduces between firms in the Japanese economy.

Blank 1: competition

Under communism, the Communist Party was the ruling class. When communist countries transitioned to capitalism, the ruling class feared it would its political power.

Blank 1: lose, forfeit, or forego

In order for the transition to capitalism to take place, , or the conversion of state-owned factories and other property to private ownership, must be accomplished.

Blank 1: privatization

Sweden was not able to stimulate its economic growth until it reduced the size of its extensive programs and increased its reforms.

Blank 1: welfare, public, or social Blank 2: free-market, capitalist, or market

Which countries are examples of a market economy? Multiple select question. Canada South Korea Vietnam Australia

Canada South Korea Australia

What countries are modern examples of mixed socialism?

China Venezuela Cuba

Which statement best describes Karl Marx's communist society?

Communism was an ideal community where everyone would contribute according to their abilities and consume according to their needs.

What characteristics do mixed economies share?

Elements of traditional economies Elements of command economies Elements of socialistic economies

Select all that apply Which is true of individual incentives in a command economy? Multiple select question. Incentives are used extensively to help factories meet their quotas. Everybody is paid the same, so there is little incentive to get ahead. Incentives are rare because central planners make all production and distribution decisions.

Everybody is paid the same, so there is little incentive to get ahead. Incentives are rare because central planners make all production and distribution decisions.

Select all that apply What characterizes a black market? Multiple select question. It is illegal because it encourages the sale of illegal and possibly harmful goods. It is illegal in the eyes of the law, even if it sells common items like food and clothing. It operates primarily at night and with a majority of stolen goods.

It is illegal because it encourages the sale of illegal and possibly harmful goods. It is illegal in the eyes of the law, even if it sells common items like food and clothing.

Select all that apply What are the advantages of a mixed economy? Multiple select question. It often offers education, employment, and health benefits. It maintains some capitalist measures such as profit and competitive markets. It spreads out the responsibility of benefits, so taxes are usually low.

It often offers education, employment, and health benefits. It maintains some capitalist measures such as profit and competitive markets.

Select all that apply What may hamper Taiwan's economic success in the future? Multiple select question. The signing of numerous trade agreements with capitalistic countries The abundance of the government's centralized economic planning The possible forced reunification with mainland China, better known as the People's Republic of China

The abundance of the government's centralized economic planning The possible forced reunification with mainland China, better known as the People's Republic of China

What disadvantage(s) does a market economy have? Multiple select question. The failure to produce enough public goods like roads and city parks A high degree of uncertainty for workers and employers The failure to adjust gradually to change

The failure to produce enough public goods like roads and city parks A high degree of uncertainty for workers and employers

During a period of transitioning to capitalism, a country may experience Multiple choice question. the benefits of early capitalism long before the country's people face economic instability. a lack of social welfare programs that give workers a cushion during periods of high joblessness. the stability of automatic stabilizers for the first time in the country's history.

a lack of social welfare programs that give workers a cushion during periods of high joblessness.

Part of the reason that Hungary was able to make a successful transition to capitalism after its break from the Soviet Union was due to its extensive experience with illegal markets.

black

The vouchers used in the privatization process were Multiple choice question. much like stock certificates that represent ownership shares of a corporation. announcements about the forthcoming privatization of a government-owned factory. certificates that could be used to purchase a portion of government-owned property.

certificates that could be used to purchase a portion of government-owned property.

The countries transitioning to capitalism are doing so because they Multiple choice question. realize that capitalism is a system that will generate more wealth. believe that capitalism will be easier to manage. would like for their citizens to have more individual freedoms.

realize that capitalism is a system that will generate more wealth.

The South Korean economy's success can be attributed to Multiple choice question. the keiretsu. the early success of Solidarity. the early opening of its markets to world trade.

the early opening of its markets to world trade.

In a economy, the different roles that people play are defined by the customs of their ancestors.

traditional

True or false: China is currently privatizing some industries, introducing some market reforms, and otherwise acting in a capitalistic manner--although its transition to capitalism is not yet complete. True false question.

true

Chile's steps toward a more capitalistic economy included Multiple choice question. using billions of its pension funds to supply entrepreneurs with capital. implementing a series of five-year plans to manage economic growth. nationalizing airlines, telephone service, and utilities.

using billions of its pension funds to supply entrepreneurs with capital.

Privatization is a critical issue in the transition to capitalism because Multiple choice question. vouchers would be needed if privatization did not take place. state-owned factories and businesses are too large to manage easily. without the reward of private ownership of capital, entrepreneurs would not take risks

without the reward of private ownership of capital, entrepreneurs would not take risks.

Which of these countries has a mixed market economy? Multiple choice question. North Korea China Canada Cuba

Canada

Under the regime of Vladimir Putin, Russia's transition to capitalism Multiple choice question. remained steady. essentially came to an end. increased in pace and scope.

essentially came to an end.

Select all that apply Why do mixed economies exist? Multiple select question. All of the other types of economies have both advantages and disadvantages, but mixed economies have only advantages. A major domestic event like a depression or a revolution brings new ways of doing things and new characteristics. There is much more diversity in the real world than in the simple traditional, command, and market economy classifications. Nations tend to change over time, sometimes taking on characteristics of other economic systems.

A major domestic event like a depression or a revolution brings new ways of doing things and new characteristics. There is much more diversity in the real world than in the simple traditional, command, and market economy classifications. Nations tend to change over time, sometimes taking on characteristics of other economic systems.

What is a disadvantage of a mixed economy? Multiple select question. A mixed economy with extensive social services is expensive to maintain. Resources are often shifted away from other projects toward welfare programs. People are unhappy with types of services that governments provide. TINSTAAFL is a problem for mixed economies.

A mixed economy with extensive social services is expensive to maintain. Resources are often shifted away from other projects toward welfare programs. TINSTAAFL is a problem for mixed economies.

Select all that apply Why do many northern European countries have elements of socialism? Multiple select question. Because their citizens have a strong sense of responsibility toward one another Because their citizens want it that way and have voted for it Because their citizens believe socialism is coming back into popularity

Because their citizens have a strong sense of responsibility toward one another Because their citizens want it that way and have voted for it

Eastern European struggles for freedom from the Soviet Union began in the country of with , the independent and sometimes illegal labor union in the country's shipyards.

Blank 1: Poland Blank 2: Solidarity

The defining characteristic of a market is that government says it is illegal.

Blank 1: black

Mixed economies with significant components of Unavailable are the most economically developed.

Blank 1: capitalism or markets

The process of converts private property to government ownership; it was one of the things that halted Argentina's transition to capitalism.

Blank 1: nationalization

The former Soviet Union changed from a rural agricultural society in 1910 to a successful command economy in just a few decades by emphasizing the growth of heavy .

Blank 1: stagnation

A major disadvantage of a mixed economy with a broad range of social programs is that must be collected to pay for them.

Blank 1: taxes

If you were a citizen of an eastern European country undergoing privatization, you would want to collect as many as possible.

Blank 1: vouchers

Countries are hoping to generate more by transitioning to capitalism.

Blank 1: wealth

Select all that apply Who makes the major economic decisions in a command economy? Multiple select question. Dictator Judiciary Consumers Monarch

Dictator Monarch

Which is true of individual incentives in a command economy? Multiple select question. Everybody is paid the same, so there is little incentive to get ahead. Incentives are rare because central planners make all production and distribution decisions. Incentives are used extensively to help factories meet their quotas. Reason: Individual incentives are relatively rare, a situation that often results in shoddy output.

Everybody is paid the same, so there is little incentive to get ahead. Incentives are rare because central planners make all production and distribution decisions.

Select all that apply What are reasons for Singapore's economic success? Multiple select question. Government subsidies that protect domestic firms and discourage multinationals with trade barriers Government investment in laboratories that attract scientists from all over the world Government-sponsored spending on employee training

Government investment in laboratories that attract scientists from all over the world Government-sponsored spending on employee training

Select all that apply What characterized Chile's transition to capitalism in South America? Multiple select question. It involved the nationalization of many energy and defense-related industries. It involved the privatization of many government-owned, centrally controlled industries. It made Chile one of the strongest free market-oriented countries in the region. It was abruptly halted when Chile's dictator decided to re-impose socialism.

It involved the privatization of many government-owned, centrally controlled industries. It made Chile one of the strongest free market-oriented countries in the region.

Select all that apply What characterizes Singapore's economy? Multiple select question. It promotes a corruption-free environment and capitalist structure. Its large land area forms the basis for trade in fossil fuels. It has per person incomes higher than incomes in the United States. It has a successful perestroika program that attracts scientists from all over the world. It uses generous tax breaks and government-sponsored spending on employee training.

It promotes a corruption-free environment and capitalist structure. It has per person incomes higher than incomes in the United States. It uses generous tax breaks and government-sponsored spending on employee training.

Select all that apply What characterized China's Great Leap Forward, which was instituted in 1958? Multiple select question. It was China's first step in transitioning the economy to capitalism. It was an attempt to revolutionize industrial and agricultural production almost overnight. It was a massive failure, because the economy never came close to achieving the planned degree of industrialization.

It was an attempt to revolutionize industrial and agricultural production almost overnight. It was a massive failure, because the economy never came close to achieving the planned degree of industrialization.

Select all that apply What characterized the Soviet economy that started with Joseph Stalin in 1927? Multiple select question. It was guided by a series of five-year plans that tried to provide answers to the WHAT, HOW, and FOR WHOM to produce questions. It initiated the Great Leap Forward to mark the Soviet Union's first steps in the transition to capitalism. It used collectivization—the forced common ownership of agricultural and industrial enterprises—as a way to stimulate the country's output.

It was guided by a series of five-year plans that tried to provide answers to the WHAT, HOW, and FOR WHOM to produce questions. It used collectivization—the forced common ownership of agricultural and industrial enterprises—as a way to stimulate the country's output.

Select all that apply What can Japan attribute its early economic success to? Multiple select question. Its capitalistic economy based on markets, prices, and the private ownership of capital Its willingness to develop and implement new technologies The existence of the keiretsu, which binds businesses together around a prominent bank

Its capitalistic economy based on markets, prices, and the private ownership of capital Its willingness to develop and implement new technologies

What actions helped make China the second-largest economy in the world today? Multiple select question. Its rejection of the Soviet five-year planning model that led to the disastrous Great Leap Forward The introduction of some market reforms that allow it to behave more like a capitalist nation Its use of perestroika, which led to significant changes in the economy

Its rejection of the Soviet five-year planning model that led to the disastrous Great Leap Forward The introduction of some market reforms that allow it to behave more like a capitalist nation

Select all that apply What can Japan attribute its early economic success to? Multiple select question. Its willingness to develop and implement new technologies The existence of the keiretsu, which binds businesses together around a prominent bank Its capitalistic economy based on markets, prices, and the private ownership of capital

Its willingness to develop and implement new technologies Its capitalistic economy based on markets, prices, and the private ownership of capital

Harsh conditions during the Great Depression of the 1930s led to what non-free market programs being adopted?

Social Security Unemployment relief Agricultural price supports The minimum wage

Why were individual incentives relatively rare in the early years of the Soviet Union? Multiple select question. The quotas issued by central planners trumped individual incentives. Everybody was paid the same, so there was no incentive to get ahead. Consumers were satisfied to work according to ability and consume according to need. Overtime hours and individual work achievements were seldom rewarded.

The quotas issued by central planners trumped individual incentives. Everybody was paid the same, so there was no incentive to get ahead. Overtime hours and individual work achievements were seldom rewarded.

Which country has a mixed socialist economy?

Venezuela

Select all that apply What new incentives must transitioning countries learn as they convert to capitalism? Multiple select question. Workers must come to work on time and put in an honest day's work. Banks and a banking system must be set up to provide loans to factories. People have to make decisions on their own rather than have decisions made for them. Workers must deal with differences in incomes and salaries for different occupations.

Workers must come to work on time and put in an honest day's work. People have to make decisions on their own rather than have decisions made for them. Workers must deal with differences in incomes and salaries for different occupations.

Taiwan, an island nation just off the coast of the much larger People's Republic of China, has an economic track record that includes Multiple choice question. a government laissez-faire, or hands-off, policy to promote individual decision-making. an abundance of the natural resource called "land" that is advantageous to manufacturing. a centralized government planning process that tries to identify growing industries.

a centralized government planning process that tries to identify growing industries.

An economic system in which private citizens own and use the factors of production for their own profit or gain is called Multiple choice question. socialism. command. capitalism. traditionalism.

capitalism.

Select all that apply South Korea's economic success is evident in the Multiple select question. extensive size of its shipbuilding and steel manufacturing industries. success of its world-class electronics industry. fact that it is a leading producer of automobiles. large amount of crude oil reserves throughout the country.

extensive size of its shipbuilding and steel manufacturing industries. success of its world-class electronics industry. fact that it is a leading producer of automobiles.

Argentina's transition to capitalism could best be described as Multiple choice question. stalled, because of the death of President Hugo Chavez. incomplete, because reduced regulations were followed by political instability and nationalization of some industries. complete, because of the pro-free market policies the country adopted and the high rates of stability in its banking sector.

incomplete, because reduced regulations were followed by political instability and nationalization of some industries.

The countries transitioning to capitalism are doing so because they Multiple choice question. believe that capitalism will be easier to manage. would like for their citizens to have more individual freedoms. realize that capitalism is a system that will generate more wealth.

realize that capitalism is a system that will generate more wealth.

When a command economy like the former Soviet Union has a large bureaucracy, the bureaucratic structure slows decision making and raises the cost of production. individual consumers have more choices in the stores. it becomes easier to coordinate all of the many production quotas.

the bureaucratic structure slows decision making and raises the cost of production.

True or false: Having to deal with new incentives is a problem all transitioning countries face. True false question.

true

True or false: There are no pure communist economies in the world today, and there have never been any in the past.

true

True or false: Vladimir Putin's use of power in Russia to regain control of the energy, natural resource, and defense-related industries left the economy with a combination of markets and government-controlled sectors. True false question.

true

True or false: When firms are privatized, capital resources tend to last longer because people take better care of things they own. True false question.

true