ECON Chapter 2

Question 1

Traditional Economy

Answer 1

Economic system in which the allocation of scarce resources, and other economic activity, is the result of ritual, habit, or custom.

Question 2

Economic Systems

Answer 2

Organized way a society provides for the wants and needs of its people.

Question 3

Command Economy

Answer 3

Economic system characterized by a central authority that makes most of the major economic decisions.

Question 4

Socialism

Answer 4

Economic system which government owns some factors of production and has a role in determining what and how goods are produced.

Question 5

Market Economy

Answer 5

Economic system in which supply, demand, and the price system help people make decisions and allocate resources; same as free enterprise economy.

Question 6

Capitalism

Answer 6

Economic system in which private citizens own and use the factors of production in order to generate profits.

Question 7

Mixed Economy

Answer 7

Economic system that has some combination of traditional, command, and market economies; also known as modified free enterprise economy.

Question 8

Great Depression

Answer 8

Worst period of economic decline in US history, lasting from approximately 1929 - 1939.

Question 9

GDP per capita

Answer 9

Gross Domestic Product on a per person basis; can be expressed in current or constant dollars.

Question 10

Privatization

Answer 10

Conversion of state-owned factories and other property to private ownership.

Question 11

Vouchers

Answer 11

Certificates that could be used to purchase government-owned property during privatization.

Question 12

Collectivization

Answer 12

Forced common ownership of factors of production; used in the former Soviet Union in agriculture and manufacturing.

Question 13

Nationalization

Answer 13

Shift of an economy, or part of an economy, from private ownership to government ownership.

Question 14

Black Market

Answer 14

Market in which goods and services are sold illegally.