Chapter 2:
Economic Systems and Decision-Making
1.
In a ____________ economy, a central authority makes most of the WHAT, HOW, and FOR WHOM decisions.
a.
traditional
b.
command
c.
market
d.
free market
2.
One advantage of a ___________ economy is that it gradually adjusts to change over time.
a.
traditional
b.
command
c.
market
d.
socialist
3.
The main drawback of the traditional economy is that it ____________ .
a.
has a great deal of uncertainty
b.
fails to answer the WHAT, HOW, and for WHOM questions
c.
requires a large government bureaucracy
d.
tends to discourage new ideas and ways of doing things
4.
When government seeks to protect Americans from adverse economic events such as layoffs and illnesses, it is trying to achieve the economic goal of ________ .
a.
full employment
b.
economic security
c.
economic growth
d.
economic equity
5.
The main economic and social goals listed in the chapter were determined by __________ .
a.
the government
b.
friends, relatives, community leaders, and elected government officials
c.
economists
d.
a panel of business experts
6.
A __________ economy has five important characteristics: economic freedom, voluntary exchange, private property rights, the profit motive, and competition.
a.
closed
b.
free enterprise
c.
command
d.
traditional
7.
A characteristic of capitalism is __________ , the act of buyers and sellers freely and willingly engaging in market transactions.
a.
government regulation
b.
private property rights
c.
voluntary exchange
d.
tariffs
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Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
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