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?
