Economics Today and Tomorrow

Chapter 2: Economic Systems and the American Economy

Economic Systems and the American Economy

The basic issues that every nation's economic system addresses are __________.
A)the type of goods and services that should be produced, the quantity of each type of good and service produced, and who should share in their use.
B)the type of goods and services that should be produced, what labor should be used to produce them, and who should distribute the goods and services.
C)the types of goods and services that should be produced, the trade-offs required by producing each type of good and service, and who should produce them.
D)the types of goods and services that should be produced, how the goods and services should be produced, and who should share in what is produced.
The major types of economic systems are __________
A)traditional, command, and market.
B)traditional, command, market, and mixed.
C)traditional, market, and mixed.
D)command, market, and mixed.
The economic system that answers the three basic economic questions according to societal customs is called __________
Which of the following is NOT a major characteristic of a pure market economic system?
A)lack of competition
B)freedom of enterprise
C)freedom of choice
D)little or no government control
Which statement about the role of government in the United States today is TRUE?
A)The ideas introduced by Adam Smith influence the federal government as much today as they did when the Constitution was written.
B)The role of government—federal, state, and local—over economic activities has increased significantly since the 1880s.
C)Although the federal government provides many more public services today, it is still forbidden to regulate private business in any way.
D)The limits imposed on the federal government by the Constitution are the same today as when it was written.
Which statement about the United States's free enterprise system is NOT TRUE?
A)The main reason that people produce goods and services is the profit incentive.
B)Individuals are free to buy whatever they can afford.
C)Laws that set safety standards protect buyers but limit freedom of choice.
D)Entrepreneurs are guaranteed unrestricted freedom and financial success.
Each of the following statements about the American economy is true EXCEPT __________
A)"Freedom of choice" in our economic system means that buyers, not sellers, make the decisions about what should be produced.
B)Competition among businesses has the effect of forcing the prices of goods and services down.
C)"Profit incentive" can be described as the motivating factor behind an entrepreneur establishing a business.
D)"Private property" refers to land owned by Americans.
Which of the following fulfills the goal of security in a market economy?
A)an employer paying the minimum wage to unskilled workers
B)the government paying Medicare
C)a nation using its limited resources wisely
D)an individual choosing to start a business
Which of the following is NOT an advantage of the American free enterprise system?
A)Individuals may choose from a wide range of lifestyles.
B)Americans enjoy a high standard of living.
C)Individuals do not have to take on any economic or political responsibilities.
D)Individuals enjoy a high degree of economic and personal freedom.
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