Chapter 2

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

Everyone knows exactly what their function is

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

It sustains a high degree of uncertainty.

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

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

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

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

Which of the statements best describes the communist ideal?

a classless society in which everyone works for the common good

Gosplan

central planning authority in the former Soviet Union

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

command

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

command and socialist economies

Perestroika

fundamental restructuring of the Soviet economy; policy introduced by Gorbachev

GDP per capita

gross domestic product on a per person basis

Solidarity

independent Polish labor union founded in 1980 by Lech Walesa

Keirestu

independently owned group of Japanese firms united to regulate competition

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

market

Societies embrace various economic systems to deal with the problem of

scarcity

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

workers

Which statement describes a disadvantage of a command economy?

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

Which country is an example of a capitalist country?

Singapore

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

Socialism

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

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

Which of the following describes a move away from capitalism?

the nationalization of major industries in Hugo Chavez's Venezuela

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

traditional