African Economic Understandings: Question Preview (ID: 13825)

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In a traditional economy, how are economic decisions made?
a) custom and habit
b) government leaders
c) consumers and planners
d) combination of consumers and producers

Which would be a problem for a community with a traditional economy?
a) People in the village find ways to make their products more efficiently.
b) The price of advanced electronics, like computers, begins to rise rapidly.
c) People in the country begin to want and need products that cannot be made or traded locally.
d) Older villagers take on younger workers to learn to make the products they have been producing.

In a command economy, how are economic decisions made?
a) custom and habit
b) government planners
c) consumers and the market
d) combination of consumers and planners

Which would be a problem in a command economy?
a) People would get rich.
b) Local craffts would be produced before manufactured goods.
c) Individual business people would risk their own money to produce goods.
d) A worker trying to start a new business on his or her own would need permission.

In a market economy, how are economic decisions made?
a) custom and habit
b) government planners
c) consumers and the market
d) individuals starting new businesses

Who takes on the financial risk in starting a new business in a market economy?
a) consumers
b) government planners
c) individual business people
d) combination of planners and investors

Why are most modern economics referred to as mixed economies?
a) Poverty is always highest in countries with market economies.
b) Government planners do not know how to handle economic problems.
c) Products made by traditional economies have no markets in the modern world.
d) Most countries have aspects of all three economic types at work in their economies.

Why do most economies in the world today operate somewhere in between a market and a command economy?
a) Government control always makes a market economy profitable.
b) Most consumers prefer government control to a free market system.
c) Government control of some aspects of the economy has never been successful in the modern world.
d) Most economies feel they need a mix of free market and some government control to be successful.

What is South Africa's main export?
a) oil
b) textiles
c) gold and diamonds
d) agricultural products

Why is specialization so valuable in international trade today?
a) Most countries can only make one product very well.
b) Specialization limits the amount of agriculture a country allows.
c) Specialization allows people to do a more efficient job at producing what they make best.
d) Specialization always keeps the prices low on good that are imported into a country.

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