A Quick Review On Economic System! Quiz

1.

1. Which is a question that nations answer when determining their type of economic system?

A.

Who gets to consume the goods and services that are produced?
B.

What goods and services will be produced?
C.

How will the goods and services be produced?
D.

All of the above

Correct Answer
D. All of the above

Explanation
Nations answer all of the above questions when determining their type of economic system. These questions are crucial in determining the allocation of resources and the functioning of the economy. "Who gets to consume the goods and services that are produced?" determines the distribution of wealth and income. "What goods and services will be produced?" determines the types of industries and sectors that will be prioritized. "How will the goods and services be produced?" determines the methods and technologies used in production. Therefore, all of these questions are important in shaping an economic system.

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2.

Societies make the decisions to answer the 3 questions of scarcity by creating

A.

Economic systems
B.

Economic Choices
C.

Opportunity Costs
D.

Factors of Production

Correct Answer
A. Economic systems

Explanation
Societies make decisions to answer the three questions of scarcity by creating economic systems. Economic systems are the structures and mechanisms that societies use to allocate resources, produce goods and services, and distribute them among individuals. These systems determine how decisions are made, what goods and services are produced, and how they are distributed. By creating economic systems, societies can effectively address the challenges posed by scarcity and ensure the efficient allocation of resources.

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3.

The traditional system generally keeps economic customs by passing them

A.

In books.
B.

On the Internet
C.

Government programs
D.

Word of mouth.

Correct Answer
D. Word of mouth.

Explanation
The traditional system of passing economic customs typically relies on word of mouth, meaning that information and practices are transmitted through oral communication from person to person. This method has been used for generations and is often seen in communities where written records may be limited or nonexistent. It involves sharing knowledge, experiences, and advice through conversations, storytelling, and informal gatherings, allowing customs to be preserved and passed down through generations.

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4.

Religion today can be credited with bringing back which economic system?

A.

Traditional
B.

Command
C.

Market
D.

Mixed

Correct Answer
A. Traditional

Explanation
Religion today can be credited with bringing back the traditional economic system. This is because many religious beliefs and practices emphasize simplicity, self-sufficiency, and communal living, which align with the principles of traditional economies. Traditional economies rely on customs, traditions, and bartering rather than market forces or government intervention. Religion often promotes values such as sharing resources, supporting local communities, and minimizing materialistic pursuits, all of which are central to traditional economic systems. Therefore, religion can be seen as a driving force in reviving and promoting traditional economic practices in today's society.

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5.

Decisions by the church elders govern the economic system used by

A.

Asian countries.
B.

Republicans.
C.

Amish Communities.
D.

Communists.

Correct Answer
C. Amish Communities.

Explanation
The correct answer is Amish Communities. The Amish are known for their strict religious beliefs and distinctive way of life. They live in close-knit communities and make decisions collectively, including those related to their economic system. The Amish practice a traditional, self-sufficient lifestyle, often relying on agriculture and craftsmanship for their livelihoods. Their economic system is based on principles of simplicity, sustainability, and community support. The church elders play a crucial role in guiding and governing this system, ensuring that it aligns with their religious beliefs and values.

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6.

When building a house or barn, the Amish use only hand tools, and drill holes for wooden pegs instead of using nails. These methods could be examples of the

A.

What question
B.

How question
C.

For whom question
D.

None of these

Correct Answer
B. How question

Explanation
The given correct answer is "How question" because the methods mentioned, such as using only hand tools and drilling holes for wooden pegs instead of nails, describe how the Amish build houses and barns.

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7.

Which is a synonym for a centrally planned economic system?

A.

Mixed economy
B.

Specialized economy
C.

Command economy
D.

Pure free market economy

Correct Answer
C. Command economy

Explanation
A command economy is a synonym for a centrally planned economic system. In this type of system, the government has control over the allocation of resources, production, and distribution of goods and services. The government determines what goods and services are produced, how they are produced, and who receives them. This is in contrast to a mixed economy, which combines elements of both market and command economies, and a pure free market economy, where the market forces of supply and demand determine the allocation of resources.

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8.

On January 1, 2014, the U.S. government will ban sales of new incandescent (old, normal bulbs) light bulbs over a certain wattage. They are doing this to encourage energy saving by the newer types of bulbs. This regulation is an example of __________________________in the U.S. capitalist system

A.

Mixed command
B.

Mixed tradition
C.

Mixed communism
D.

Mixed environmentalism

Correct Answer
A. Mixed command

Explanation
This regulation is an example of mixed command in the U.S. capitalist system because it involves government intervention in the market by imposing a ban on certain products. In a mixed command system, the government plays a role in regulating and controlling certain aspects of the economy, alongside private ownership and market forces. In this case, the government is using its authority to promote energy-saving practices by prohibiting the sale of certain types of light bulbs.

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9.

A market economy is one in which:

A.

Buyers and sellers operate according to government guidelines
B.

Individuals are free to exchange in business transactions (voluntary exchange) and their economic activity sets prices
C.

Stores stay open until late at night only when they are given permission
D.

There is a central market committee that solves problems

Correct Answer
B. Individuals are free to exchange in business transactions (voluntary exchange) and their economic activity sets prices

Explanation
In a market economy, individuals have the freedom to engage in business transactions voluntarily. This means that buyers and sellers can interact and exchange goods and services based on their own decisions and preferences. The prices of goods and services are determined by the interactions of these individuals in the market. Unlike a command economy, where government guidelines dictate economic activities, a market economy allows for individual autonomy and the influence of supply and demand in setting prices. The other options mentioned, such as government guidelines, permission for store hours, and a central market committee, do not align with the concept of a market economy.

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10.

The free market system is also known by other names. Which of the following is NOT one of these?

A.

Capitalism
B.

Free Enterprise
C.

Free Expression
D.

Private Enterprise

Correct Answer
C. Free Expression