Chapter 2 Economics Key Questions 1-7

4. How is Adam Smith's philosophy incorporated into the American economy?

Adam Smith's philosophy is incorporated in American economy because we still base things off of this belief. Our country is still run by these philosophies.

5. In what way is America more of a mixed economy rather than a true market economy?

America is more of a mixed economy because even though we still control many things in our economy, our government has a major say in what gets done with our goods and services. The government puts our taxes towards the economy and other goods and services. This makes it a mixed economy more than a true market economy.

7. What is Karl Marx's philosophy and how does it differ from the practice of communism throughout world history?

Karl Marx viewed history as continual struggle between various groups in society. He saw the struggle going on between capitalists. He believed that communism was a system with no need for government. This differs from today because the central government ends up controlling the entire economy in today's government.

2. How does each of the following answer the 3 basic questions: command economy, market economy, mixed economy?

The 3 basic questions of economy are answered differently based off the economy type. The command economy answers these questions by the government leaders controlling the factors of production. The market economy answers these questions by letting the individuals choose what is best for them and their families. The mixed economy answers these questions by using individual decisions mixed with government intervention.

3. What are the characteristics that define the America economic system?

The characteristics that define the American economic system are the limited role of government, the freedom of enterprise, freedom of choice, profit incentive, competition, and private property.

6. What are the goals of free enterprise?

The goals of free enterprise are to let individuals own and control factors of production. It gives everyone a free chance and opportunity to do things. There is no set guarantee of success.

1. An economic system answers what three basic questions?

What goods and services should be produced? How should they be produced? Who should share in what is produced?