Chapter 2 Worksheets

It sustains a high degree of uncertainty.

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

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?

perestroika

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

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?

GDP per capita

gross domestic product on per person basis

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

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

False

(T/F) Communist countries like North Korea and Cuba are examples of mixed economies.

Great Leap Forward

Chinese strategy used to quickly revolutionize industrial agriculture and production

Elders and ancestors make certain that things are done in specific ways.

How are economic transactions shaped in a traditional economy?

command

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

traditional

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

Singapore

Which country is an example of a capitalist country?

Its unemployment rates are relatively low.

Which of these statements apply to present-day Sweden?

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 the 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?

privatization

conversion of state-owned property to individual ownership

Solidarity

independent Polish labor union founded in 1930 by Lech Walesa

True

(T/F) Mixed economies can evolve when societies with different kinds of economies interact.

False

(T/F) Mixed economies work to the degree that they embrace democracy.

True

(T/F) Socialist economies include aspects of both command and free-enterprise systems.

True

(T/F) There is always some degree of government involvement in a mixed economy.

nationalization

economic shift from private ownership to government ownership

command economy

economic system in which a central authority makes the major economic decisions

capitalism

economic system in which private citizens own and use resources to make a profit

economic system

efficient way of allocating resources and producing and distributing goods and services in a society

Five-Year Plan

comprehensive, centralized economic strategy for achieving rapid industrialization, used by the Soviet Union and China

scarcity

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

market

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

Capitalism can restore a damaged economy.

What conclusions 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?

a large and inefficient bureaucracy

Which of the following could raise the cost of production in a command economy?

economic reforms following the Great Depression in the United States

Which of the following describes a move away from capitalism?

command, socialism, free market

Which of the following lists economic systems in order from least to most flexible?

a classless society in which everyone works for the common good

Which of the following statements best describes the communist ideal?

Everyone knows exactly what their function is.

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

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

black market

economic sector in which goods and services are sold illegally

keirestsu

independently owned group of Japanese business firms united to regulate competition

market economy

system in which economic activity is driven by supply, demand, and the price system

traditional economy

system in which economic activity is the result of ritual, habit, or custom