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1. | In a ____________ economy, a central authority makes most of the WHAT, HOW, and FOR WHOM decisions.
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| A) traditional
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| B) command
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| C) market
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| D) free market
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2. | One advantage of a ___________ economy is that it gradually adjusts to change over time.
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| A) traditional
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| B) command
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| C) market
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| D) socialist
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3. | The main drawback of the traditional economy is that it ____________ .
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| A) has a great deal of uncertainty
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| B) fails to answer the WHAT, HOW, and for WHOM questions
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| C) requires a large government bureaucracy
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| D) tends to discourage new ideas and ways of doing things
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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 ________ .
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| A) full employment
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| B) economic security
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| C) economic growth
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| D) economic equity
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5. | The main economic and social goals listed in the chapter were determined by __________ .
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| A) the government
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| B) friends, relatives, community leaders, and elected government officials
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| C) economists
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| D) a panel of business experts
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6. | A __________ economy has five important characteristics: economic freedom, voluntary exchange, private property rights, the profit motive, and competition.
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| A) closed
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| B) free enterprise
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| C) command
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| D) traditional
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7. | A characteristic of capitalism is __________ , the act of buyers and sellers freely and willingly engaging in market transactions.
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| A) government regulation
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| B) private property rights
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| C) voluntary exchange
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| D) tariffs
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