Economic Systems

Question 1

What are the three basic economic questions that different economic systems attempt to resolve?

Answer 1

What to produce, how to produce, for whom to produce

These questions are fundamental to understanding how resources are allocated in different economic systems.

Question 2

How do market economies allocate resources?

Answer 2

Primarily on the forces of supply and demand

Market economies rely on consumer preferences and profit motives to guide production decisions.

Question 3

Give an example of a country with a market economy.

Answer 3

United States or United Kingdom

These countries exemplify market economies where decisions are largely driven by market forces.

Question 4

What characterizes command economies?

Answer 4

Centralised government planning makes most decisions about production

In command economies, the government determines what, how, and for whom goods are produced.

Question 5

Name two examples of command economies.

Answer 5

North Korea, Cuba

These countries illustrate the characteristics of command economies.

Question 6

What defines mixed economies?

Answer 6

Combine elements of both market and command economies

Mixed economies feature varying degrees of government intervention alongside market forces.

Question 7

List three countries that are examples of mixed economies.

Answer 7

Norway, Singapore, China, Saudi Arabia, Australia

These countries incorporate both market and command elements in their economic systems.