Chapter 2 Review

Question 1

Types of economic systems

Answer 1

1. ) Traditional
2. ) Command
3. ) Market
4. ) Mixed

Question 2

Answer to 3 questions can be found in the past; did what your parents did; customs determine how goods are produced

Answer 2

traditional economy

Question 3

Government answers the 3 economic questions; “planned”economy, Gov controls factors of production
consumers have little say

Answer 3

command economy

Question 4

individuals answer three questions; people have all power

Answer 4

market economy

Question 5

scottish economist that Wealth of Nations that explained self interest

Answer 5

adam smith

Question 6

3 main types of mixed economy

Answer 6

1. ) Authoritarian Socialism
2. ) Capitalism
3. ) Democratic Socialism

Question 7

Example of Authoritarian Socialism

Answer 7

Cuba, Nazi Germany, North Korea

Question 8

Example of Capitalism

Answer 8

USA, JAPAN

Question 9

Example of Democratic Socialism

Answer 9

France, Sweden

Question 10

What is democratic a mix of?

Answer 10

Authoritarian Socialism and Capitalism

Question 11

5 pillar of US FREE ENTERPRISE system

Answer 11

1. ) Own private property and enter contracts
2. ) Make individual choices
3. ) Engage in Competition
4. ) Make Decisions based on self interest
5. ) Participate in the economy with limited gov regulation

Question 12

what dies the circular flow model include?

Answer 12

flow of resources and products and flow of payment

Question 13

6 major goals of US economy

Answer 13

1. ) Freedom
2. ) Efficiency
3. ) Equity
4. ) Security
5. ) Stability
6. ) Growth

Question 14

what does stability require?

Answer 14

1. ) Full Employment

2. ) Price stability