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Economic Systems > Test > Flashcards

Test Flashcards

1
Q

the study of individuals, families, and businesses in the economy

A

Microeconomics

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2
Q

the study of the economy as a whole and is concerned with large-scale economic activity

A

Macroeconomics

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3
Q

studies economic behavior as it is

A

Positive Economics

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4
Q

involves judgements of what economic behavior ought to be

A

Normative Economics

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5
Q

the way a society uses its scarce resources to satisfy its people’s unlimited wants

A

Economic System

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6
Q

There are three basic types of economic systems:

A

Traditional, Command, and Market Economies

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7
Q

an economic system in which families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down from generation to generation

A

Traditional Economy

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8
Q

the government decides what goods and services will be produced, how they will be produced and how they will be distributed

A

Command Economy

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9
Q

is based on individual choice, not government directives; Consumers and producers drive the economy

A

Market Economy

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10
Q

No other economist has had as much influence as

A

Adam Smith

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11
Q

was born in Scotland in 1723 and studied, and later taught, literature, logic, and moral philosophy

A

Adam Smith

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12
Q

In this book, Smith challenged the government of the homeland controlled trade with its colonies

A

Wealth of Nations

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13
Q

What guides the marketplace according to Adam Smith?

A

Invisible Hand

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14
Q

A system in which the society’s leaders, usually members of the central government, make all economic decisions is called a

A

Centrally Planned Economy

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15
Q

an economic system in which the government owns some or all of the factors of production

A

Socialism

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16
Q

an economic system in which the government owns all the factors of production and there is little or no political freedom

A

Communism

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17
Q

requires absolute obedience to those in power

A

Authoritarian System

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18
Q

is established through the democratic political process rather than through the violent overthrow of the government

A

Democratic Socialism

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19
Q

was born in what is now Germany in 1818 and grew up in middle-class comfort

A

Karl Marx

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20
Q

What did Marx think created wage slavery?

A

Industrial Revolution

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21
Q

Marx, assisted by Engels, laid out ideas of worker overthrow in

A

The Communist Manifesto

22
Q

Advantages of a traditional economy:

A

Traditional economies clearly answer the three economic questions
They produce what best ensures its survival
The methods of productions are the same as they have always been
Systems of distribution are determined by custom or tradition
Little disagreement over economic goals and roles

23
Q

Advantages of Command Ecomony

A

They seek to provide for everyone

Leaders in a command economy can use the nation’s resources to produce items that may not make money in a market economy

24
Q

The principle that the government should not interfere in the economy is called

A

Laissez Faire Economics

25
Q

is an economic system that is based on private ownership of the factors of production

A

Capitalism

26
Q

is a market economy in its pure form

A

Laissez Faire capitalism

27
Q

trade in which both traders believe that what they are getting is worth more than what they are giving up

A

Voluntary Exchange

28
Q

What guides voluntary exchanges?

A

Self-interest

29
Q

is considered a financial gain from a business transaction

A

Profit

30
Q

is the effort of two or more people. Acting independently, to get the business of others by offering the best deal

A

Competition

31
Q

is the is the idea that because consumers are free to purchase what they want and reuse products they do not, they have the ultimate control over what is produced

A

Consumer Sovereignty

32
Q

acts as a control on self-interested behavior, guiding the market toward a balance between higher value and lower prices

A

Competition

33
Q

is a situation in which people concentrate their efforts in the areas in which they have an advantage

A

Specialization

34
Q

removes the need for household to be self-sufficient, and markets allow households to trade for what they need

A

Specialization

35
Q

is a tool that economists use to understand how market economies operate

A

Circular Flow Model

36
Q

The model represents the two key economic decision makers in a market economy

A

Households and Businesses

37
Q

The market for goods and services is called

A

Product Market

38
Q

The suppliers of the product market are

A

businesses

39
Q

is the market for the factors of production

A

Factor Market

40
Q

What is the primary focus In a pure market economy,

A

The good of the individual

41
Q

most common type of economic system today

A

Mixed economy

42
Q

is an economy that has elements of traditional, command, and market systems

A

mixed economy

43
Q

In the United States what economy dominates?

A

Market

44
Q

tried to find a middle ground between socialism and capitalism

A

France

45
Q

while also a mixed economy, has much greater government involvement

A

Sweden

46
Q

The Swedish government and government-related organizations own

A

1/3 of all Swedish companies

47
Q

Swedish citizens receive

A

Cradle to grave benefits

48
Q

to change from private ownership to government or public ownership

A

nationalize

49
Q

to change from government or public ownership to private ownership

A

privatize

50
Q

One way to help privatize an industry is to

A

open it up to foreign investors

\

51
Q

refers to all the economic interactions that cross international boundaries

A

Global Economy

52
Q

also have been enhanced by cross-border business partnerships

A

Globalization

Economic Systems (1 decks)

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