social 12 (econ)- chapter 2

Question 1

based of a society’s values- its customs and traditions. (past customs)

Answer 1

traditional economy

Question 2

relies on government officials to answer the three basic economic questions

Answer 2

command economy

Question 3

individuals answer the three basic questions. people can produce whatever they want

Answer 3

market economy

Question 4

combines elements of traditional, market, and command economic models to answer the three questions

Answer 4

mixed economy

Question 5

free exchange of goods and services

Answer 5

market

Question 6

the impulse that encourages people to fulfill their needs and wants

Answer 6

self-interest

Question 7

something that encourages you to behave in a particular way

Answer 7

incentives

Question 8

government controls nearly all the factors of production

Answer 8

authoritarian socialism (communism)

Question 9

individuals own the factors of production and answer the basic economic questions

Answer 9

capitalism

Question 10

the government owns some of the factors of production

Answer 10

democratic socialism

Question 11

a system under which business can be conducted freely with little government intervention

Answer 11

free enterprise

Question 12

goods that are owned by individuals rather than government

Answer 12

private property

Question 13

agreements with one another to buy and sell goods and services

Answer 13

contracts

Question 14

represents all the exchanges of goods and services in the economy (green)

Answer 14

product market

Question 15

represents the exchange of resources between households (gold)

Answer 15

resource market

Question 16

the money paid to households by business firms and the gov in exchange for the households’ resources

Answer 16

income

Question 17

lowest possible level of unemployment in the economy

Answer 17

full employment

Question 18

achieved when the overall price level of the goods and services available in the economy is relatively consistent

Answer 18

price stability

Question 19

refers to people’s economic well being

Answer 19

standard of living

Question 20

list the five main features of the free enterprise system found in the united states

Answer 20

1. own private property and enter into contracts
2. make individual choices
3. engage in economic competition
4. make decisions based on self interest
5. participate in the economy with limited government involvement and regulation

Question 21

competition leads to what two things?

Answer 21

better quality

better prices

Question 22

list the six major goals for US economic policy

Answer 22

1. freedom
2. efficiency
3. equity
4. security
5. stability
6. growth