Economics And Economic Systems Review Question Preview (ID: 21404)
Economic Systems, And U.S. Economy.
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What is an ADVANTAGE of a market economy compared with a traditional economy?
a) In a market economy, economic decisions are made the way they have always been made.
b) In a market economy, innovation and competition in the marketplace are encouraged.
c) In a market economy, the government decides what is produced.
d) In a market economy, there is an equal standard of living for everyone.
When Wendy's was successful at selling salads in its restaurants, McDonald's started to sell salads, too. This is an example of:
a) competition
b) freedom of enterprise and choice.
c) private property ownership.
d) self-interest and profit motive.
How does the Federal Reserve impact the U.S. economy?
a) Circulates more money to stimulate consumer purchasing
b) Decreases money circulation to help businesses
c) Raises interest rates to increase employment opportunities
d) Raises interest rates to stimulate consumer purchasing
What is a difference between a traditional economy and a free enterprise system?
a) Decisions are made the way they always have been in a free enterprise system.
b) Economic decisions are centered around the family in a free enterprise economy.
c) Economic decisions are determined by competition in a traditional economy.
d) Supply and demand drive economic decisions in a free enterprise system.
What is a characteristic of a command economy compared with other types of economic systems?
a) Business owners are free to make their own economic decisions.
b) Decisions are based on customs and the way things have always been done.
c) Consumers make the decisions about what is produced.
d) Government provides an equal standard of living for everyone.
How does a bear market impact the U.S. economy?
a) Business sales will increase rapidly.
b) Businesses will be able to hire more workers.
c) Consumers will be able to spend more money.
d) Consumers will spend less money and save more.
What is an advantage of the market portion of the United States economic system?
a) Businesses determine what to produce based on demand.
b) Consumers only purchase what the government allows.
c) Government tells business what to produce based on supply.
d) There is no government regulation of any businesses.
What is a DISADVANTAGE of a traditional economy compared to the other types of economic systems?
a) Competition guides production decisions.
b) Decisions are centered toward the family.
c) Government takes care of people's needs.
d) State-of-the-art technology is not used.
Compare the way economic decisions are made in an Amish community with the way they are made in Cuba.
a) Individuals and government make the decisions in an Amish community.
b) Individuals make the decisions in Cuba.
c) Tradition dictates how decisions are made in Cuba.
d) Tradition dictates how decisions are made in an Amish community.
What is a difference between a market economy and a command economy?
a) Competition provides consumers choices in a market economy.
b) Supply and demand determine prices in a command economy.
c) The government ensures much competition in a command economy.
d) The government selects what is produced in a market economy.
In the United States economy, interstate highways, public water systems, and Medicare are all classified as:
a) benefits of private enterprise
b) government provided services
c) services provided by financial institutions
d) tax benefits or exemptions
How does e-commerce impact the U.S. economy
a) Competition in the marketplace is increased
b) Consumers have fewer choices of goods.
c) More salespeople are needed in stores.
d) Prices of all goods will increase rapidly
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