Question 1

What are the types of economic systems?

Accepted Answer

Market economy, centrally-planned economy, mixed economy

Question 2

What is a market economy and its characteristics?

Accepted Answer

A market economy is also known as capitalism or private enterprise. Businesses, consumers, and government act independently of each other. It is characteristic for having private property (people and corporations owning property), profit (belongs to owners of businesses), and competition. No true market economy in the world - the US is the closest.

Question 3

What is a centrally-planned economy and its characteristics?

Accepted Answer

A centrally-planned economy is also known as communism or command economy. Decisions are made by the government. It is characteristic of having limited ownership of property, profit belonging to the government, and limited competition due to the government determining the price, quality, style and the amounts of goods and services. North Korea, Cuba

Question 4

What is a mixed economy and its characteristics?

Accepted Answer

A mixed economy between market and centrally-planned economies. Also known as a modified free enterprise system. Private property is owned by individuals, corporations, or government. Profit is encouraged, but is taxed to support government projects. Strong competition amoungst corporations exist, but the government may also be a competitor (ex. fedex vs Canada Post)

Question 5

What are the most prevalent forms of government?

Accepted Answer

Democracy and autocracy

Question 6

What is a democracy and its characteristics?

Accepted Answer

Characterized by free and fair elections, the rule of law, free speech, the right to assemble, a free press, and freedom of religion.

Question 7

What is an autocracy and its characteristics?

Accepted Answer

Ruled by a single individual or a small group of people. One consistent government. Proponents of autocracy believes that decisions will be rational and in the interest for the entire country rather than special groups, and have a long-term focus.

Question 8

What are the four stages of the business cycle?

Accepted Answer

Recession/Contraction Trough Expansion Peak image: http://financeandcareer.com/wp-content/uploads/2014/03/business-cycle-graph.jpeg or page 105

Question 9

What ways do governments affect international trade and business?

Accepted Answer

- Establishing import/export laws - Setting tariffs - Maintaining membership in trade organizations and negotiating trade agreements - Establishing immigration laws - Determining monetary policy (including currency exchange rates) - Determining fiscal policy, including taxation laws - Signing tax treaties with foreign governments - Education - Military systems - Establishing environmental policies - Building infrastructure, such as roads and sewer systems - Ordering embargoes

Question 10

What did The North American Free Trade Agreement (NAFTA) do for trade? Pros and cons?

Accepted Answer

Established in January 1994 Involves Canada, the US, and Mexico Eliminated tariffs and other trade barriers, promotes fair competition among the three countries. Intellectual property rights are protected.

Question 11

NAFTA's pros and cons?

Accepted Answer

Pros - increased prosperity for North American citizens - many higher-paying jobs have been created in Canada in the education, engineering, and banking sectors - market competition has grow, improving choices for consumers - freer flow of goods and services across North American borders Cons - Many manufacturing jobs have been lost to Mexico due to cheaper labour costs - wages had to be limited for manufacturers to stay in Canada/US - wage gap has gotten bigger in the US - tarrifs on corn, beans, sugar, and milk have resulted in higher amounts of competition against small farmers in Mexico - Loss of Canadian culture - more US companies opened in Mexico, and workers have little health protection, earn low wages, and work many hours a day

Question 12

The European Union is a trade agreement encompassing ______________________ countries in Europe and a population of almost half a ____________ people. It was first signed ______________, _______.

Accepted Answer

twenty-seven, billion, November 1, 1993

Question 13

The EU countries are:

Accepted Answer

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

Question 14

The EU implemented the euro for:

Accepted Answer

``` Decreasing the risk of exchange-rate fluctuations Price transparency Elimination of transaction cost Easy billing Increased markets Economic stability Enhanced labour movement ```

Question 15

Disadvantages of the euro?

Accepted Answer

Initial costs Lack of national control (Greece economy) loss of tradition

Brainscape's Knowledge GenomeTM

Economic systems, political systems, the business cycle, role of government in IB, Trade agreements and organization Flashcards

Brainscape's Knowledge Genome^TM