economics chapter 2
Who makes the decisions in a command economy?
A king or ruler with absolute power
Why do mixed economies grow faster than traditional economies?
Because they embrace reforms like allowing private property and using markets
Which is NOT something that Japan and South Korea have in common?
Boards of directors regulating competition between firms
What is one advantage of a mixed market economy in a democracy?
Citizens can vote to help those in need economically
Which type of economy has a disadvantage in that it produces low-quality goods?
Command
How does a traditional economy answer the basic questions of WHAT, HOW, and FOR WHOM to produce?
Customs, traditions, and the elders decide WHAT, HOW, and FOR WHOM to produce
Which is NOT an advantage of a mixed market economy?
Decentralized decision making
Which of the following describes an example of privatization?
Formerly state-owned companies are sold or given to citizens
What's a main disadvantage of a traditional economy?
Individuals who act differently, break the rules, or try something new are punished
Why is China considered a mixed economy?
Its economy includes government control as well as market and tradition
A market economy allows buyers and sellers to do what?
Make their own decisions regarding what to buy or what to sell
Which type of economy is best able to adjust to change over time?
Market
What type of economy is most common worldwide?
Mixed
Who affects the choices of all in a market economy?
No one group affects the choices of others
Which is a modern example of a command economy?
North Korea
What's a benefit of having privately owned resources in a market economy?
People take better care of productive goods and resources when they actually own them
Which of the following is an example of the advantages of capitalism?
Strong economic growth in countries such as Germany, South Korea, and the United States
What's a key difference between a command economy and socialism?
The government of a command economy owns all of the productive resources, whereas the government of a socialist economy owns just some
What is the key similarity between a command economy and socialism?
The major economic decisions are made by government for the people, not by the people
An example of a country that is resisting capitalism is
Venezuela
The term describing forced common ownership of factors of production is
collectivization
A capital-intensive approach is best suited to
factory and industrial work
In the "communist" economies that exist today,
governments exert great control over the economy
A state in which everyone contributes according to their abilities and consumes based on their needs
has never existed
A group of companies controlled together by a board of directors in order to regulate competition is referred to as
keiretsu
A black market is
one in which goods are sold illegally
An example demonstrating how mind-sets must change in order to transition to capitalism is
people have to learn to make their own decisions in a free market
There are many mixed economies in the world today because
people wanted benefits that strictly traditional, capitalistic, or communist economies did not provide
Programs that provide services for the public using taxpayer dollars are often considered
socialist
The level of government involvement in a mixed economy can best be described as
varied
A factor contributing to the spread of capitalism across the world is that
world-wide media connections allow everyone to be aware of capitalism's benefits
