Economic Systems 1
In a traditional economy, information about the way goods are produced is passed from one generation to the next by the…
A. family
B. legal system
C. public schools
D. government
A. family
Which statement describes an aspect of a traditional economy?
A. Profit motivates individuals to set up private businesses.
B. The interplay of supply and demand regulates prices.
C. Tradition and customs greatly influence economic decisions.
D. Government directs and controls the means of production.
C. Tradition and customs greatly influence economic decisions.
Which is a major feature of an economy based on subsistence farming?
A. Most adults work outside the home.
B. Farmers compete with each other.
C. Farmers raise just enough crops for their family to survive.
D. The government decides which crops will be grown.
C. Farmers raise just enough crops for their family to survive.
Japan has few natural resources, but it has one of the most highly developed economies in the world. What best explains this achievement?
A. It imported manufactured goods.
B. It developed technologies that can be exchanged for the resources it needs.
C. It printed more money whenever living standards started to decline.
D. It produced goods and services without using natural resources.
B. It developed technologies that can be exchanged for the resources it needs.
Because Saudi Arabia has vast oil reserves, it produces and refines oil. Because of its climate and soils, Colombia grows coffee beans. Because Japan consists of islands, many of its people engage in fishing. Which conclusion is best supported by the information in these examples?
A. Major urban centers are usually found along rivers.
B. Technology has little effect on economic activities.
C. The physical geography of an area often affects its economic activities.
D. Natural resources are more important than climate to economic activities.
C. The physical geography of an area often affects its economic activities.
The opportunity to make a profit drives people to put their money at risk. Producers determine the supply, or availability, of a product. Consumers determine the demand for a product. These features best describe the workings of a…
A. traditional economy
B. free enterprise economy
C. socialist economy
D. communist economy
B. free enterprise economy
I. ______________________________
A. Interaction of Supply and Demand
B. Profit Incentive
C. Entrepreneurs
Which heading best completes the partial outline?
A. Types of Economic Systems
B. Characteristics of a Free Enterprise Economy
C. Structure of a Socialist Economic System
D. Cottage Industries
B. Characteristics of a Free Enterprise Economy
Which is an example of a primary economic activity?
A. growing corn on a farm for export
B. working in a plant, manufacturing automobiles
C. teaching guitar lessons at a local school
D. managing a large multinational corporation
A. growing corn on a farm for export
Uneven distribution of productive resources ---> Regional specialization in production. ---> ?
Which phrase best completes the flowchart?
A. Higher production costs
B. Growth of global trade
C. Higher tariff rates
D. Decreased use of consumer goods
B. Growth of global trade
What goal led to the formation of both the North American Free Trade Agreement (NAFTA) and the European Union (EU)?
A. to keep communism out of Western Europe
B. to reduce environmental pollution
C. to increase economic cooperation between member nations
D. to eliminate global climate change
C. to increase economic cooperation between member nations
Which is a central characteristic of a free market economy?
A. The government owns the means of production.
B. All wage earners are paid the same amount.
C. Labor unions are prohibited.
D. Businesses are driven by the desire for profits.
D. Businesses are driven by the desire for profits.
Which group has the greatest influence in determining what goods and services will be produced in a communist economic system?
A. farmers
B. government officials
C. consumers
D. business leaders
B. government officials
Which is an example of a secondary economic activity?
A. growing corn on a farm for export
B. working in a plant, manufacturing automobiles
C. teaching guitar lessons at a local school
D. managing a large multinational corporation
B. working in a plant, manufacturing automobiles
Which statement provides an important reason why countries and regions specialize in their economic activities?
A. They become more self-sufficient.
B. They do not wish to compete.
C. They have different productive resources than other places.
D. They are unable to overcome trade barriers.
C. They have different productive resources than other places.
Which forces play the greatest role in determining the distribution of goods and services in a free enterprise economic system?
A. court rulings and expert opinions
B. government officials and military needs
C. producer supply and consumer demand
D. village elders and community tradition
C. producer supply and consumer demand
In which economic system would you expect the widest selection of consumer goods?
A. traditional
B. free enterprise
C. socialist
D. communist
B. free enterprise
In a socialist economic system, the government…
A. has little say in what goods are made.
B. does not influence the distribution of goods and services.
C. guarantees all consumers a high income.
D. often owns major businesses.
D. often owns major businesses.
Which statement would be true for a country with a large number of people engaged in quaternary economic activities?
A. Most people are engaged in subsistence agriculture.
B. It has a high level of infant mortality.
C. It has a low level of literacy.
D. Many occupations involve information processing and management.
D. Many occupations involve information processing and management.
Which characteristic is typical of a less developed country?
A. Government does not interfere in the economy.
B. Entrepreneurs play a key role in the nation’s economy.
C. There is a high infant mortality rate and a short life expectancy.
D. There is a high literacy rate and a long life expectancy.
C. There is a high infant mortality rate and a short life expectancy.
Country A has large deposits of iron and the technology to make cars and trucks. However, it lacks grazing land to raise livestock to create butter. Country B is covered in rolling fields and has a large supply of cows. Its farmers are efficient at making large amounts of butter, but they do not produce trucks to carry this butter to cities and ports. Based on these facts, what is the most likely result?
A. Country A will begin to make its own butter.
B. Country A and B will trade products with each other.
C. Country B will start to manufacture its own trucks.
D. Country B will sell trucks to Country A
B. Country A and B will trade products with each other.
In Indonesia, the government owns large industries and sets some prices. However, private businesses are also encouraged and several hundred are actively traded on the Indonesian Stock Exchange. This country’s economic system can best be classified as…
A. traditional
B. free enterprise
C. socialist
D. communist
C. socialist
The Minister of Economics has created a plan for the economy which emphasizes the production of iron, steel, and hydroelectric power. In manufacturing, such goods as tanks and tractors will receive high priority. Consumer goods are regarded as less essential. The people are expected to sacrifice comfort in order to raise the level of industrialization of their country. Based on the information in the article, the Minister of Economics most likely lives in a country that has a…
A. traditional economy
B. free enterprise economy
C. socialist economy
D. communist economy
D. communist economy
Which type of economic activities would most likely be found in a newly industrialized country with commercial industry?
A. primary activities
B. secondary activities
C. tertiary activities
D. quaternary activities
B. secondary activities
A newly industrialized country is usually characterized by having…
A. a large number of workers engaged in manufacturing.
B. most people engaged in subsistence agriculture.
C. a lack of human resources like skilled and unskilled labor.
D. most of its workers engaged in quaternary economic activities.
A. a large number of workers engaged in manufacturing.
An essential characteristic of a communist economy is the…
A. interaction of supply and demand.
B. organization of worker unions.
C. privatization of business.
D. government ownership of property.
D. government ownership of property.