Unit 3: Chapter 4 - Economics & Politics

Question 1

What is the definition of economics?

Answer 1

The study of how people make decisions in a world where wants are unlimited but resources are limited.

Question 2

What is a market economy?

Answer 2

An economic system determined by free competition where businesses, consumers, and government act independently.

Question 3

What are the characteristics of a market economy?

Answer 3

1) Corporations and people are encouraged to own private property
2) Profit belongs to business owners
3) Companies compete based on quality, services, price, reputation, and warranties
4) Consumers have greater selection
5) Companies have an incentive to innovate

Question 4

What is a centrally planned economy?

Answer 4

An economic system where the government controls all elements of the economy, including prices, wages, and production.

Question 5

What are the characteristics of a centrally planned economy?

Answer 5

1) AKA communism or command economy
2) Government controls all elements of the economy, including prices, wages, and production
3) Government provides education, health care, employment, and housing to all members of society

Question 6

What is a mixed economy?

Answer 6

An economic system that combines government intervention and private enterprise.

Question 7

What are the characteristics of a mixed economy?

Answer 7

1) AKA modified free enterprise system
2) Falls between a market economy and a centrally planned economy
3) Combines government intervention and private enterprise

Question 8

What is a traditional economy?

Answer 8

An economic system where traditions and customs govern economic decisions.

Question 9

What are the characteristics of a traditional economy?

Answer 9

1) Traditions and customs govern economic decisions
2) Economic activities are usually centred toward the family, tribe, or ethnic group
3) Resources are allocated based on inheritance
4) Farming, hunting, and gathering are done largely in the same fashion as the generation before

Question 10

What is a political system?

Answer 10

The type of government by which a country is run.

Question 11

What are the different types of political systems?

Answer 11

1) Democracy
2) Autocracy
3) Theocracy
4) Monarchy
5) Aristocracy

Question 12

What is a democracy?

Answer 12

A state governed by all eligible members of the population through elected representatives.

Question 13

What are the characteristics of a democracy?

Answer 13

1) Free and fair elections
2) Rule of law
3) Free speech and press
4) Right to assembly
5) Freedom of religion

Question 14

What is an autocracy?

Answer 14

A state governed by a single individual or a small group of people with unlimited power.

Question 15

What are the characteristics of an autocracy?

Answer 15

1) Strong military presence
2) Controls all aspects of citizens’ lives
3) Citizens have no influence on government

Question 16

How do corporations influence governments?

Answer 16

1) Contributing large amounts to political campaigns
2) Participating in trade missions with politicians
3) Pressuring government to change or adopt beneficial policies

Question 17

What is lobbying?

Answer 17

The process through which companies, special interest groups, or individuals attempt to influence government officials to endorse public policy favorable to these groups

Question 18

Give an example of a powerful lobbying group in the United States.

Answer 18

The NRA (National Rifle Association) is
a powerful group in the United States that lobbies the
government on gun-control issues.

Question 19

What are some of the ways government affects international trade and business?

Answer 19

1) Establishing import and export laws
2) Setting tariffs
3) Maintaining membership in trade organizations and negotiating trade agreements
4) Determining monetary policy, including currency exchange rates
5) Determining fiscal policy, including taxation laws
6) Building infrastructure, such as roads and sewer systems

Question 20

What are underdeveloped countries also referred to as?

Answer 20

Least-developed or third-world countries

Question 21

What characterizes developed countries?

Answer 21

1) High reliance on secondary and tertiary industries
2) High standards of living
3) High literacy rates
4) Major advancements in health care and technology

Question 22

What are developing countries characterized by?

Answer 22

1) Improved literacy rates
2) Increased access to health care and social services
3) Technological advancement
4) A move to manufacturing base
5) Population moving from rural areas to cities

Question 23

What are the characteristics of underdeveloped countries?

Answer 23

1) Severe poverty
2) Lack of social services
3) Poor infrastructure
4) Low literacy
5) Limited access to technology
6) Agriculture- or resource-based economies
7) Long-term political issues

Question 24

Developed countries are also known as _______.

Answer 24

Industrialized or first-world countries

Question 25

Developing countries are also known as _______.

Answer 25

Emerging or second-world countries

Question 26

Developed countries typically have a high _______.

Answer 26

Per capita income or strong gross domestic product

Question 27

What is corporate influence on government?

Answer 27

The ways businesses affect government policies and decisions through lobbying, campaign funding, and partnerships.