Economics Principles & Practices

Chapter 2: Economic Systems and Decision Making

Self-Check Quizzes

1
In a ____________ economy, a central authority makes most of the WHAT, HOW, and FOR WHOM decisions.
A)traditional
B)command
C)market
D)free market
2
One advantage of a ___________ economy is that it gradually adjusts to change over time.
A)traditional
B)command
C)market
D)socialist
3
The main drawback of the traditional economy is that it ____________.
A)has a great deal of uncertainty
B)fails to answer the WHAT, HOW, and for WHOM questions
C)requires a large government bureaucracy
D)tends to discourage new ideas and ways of doing things
4
When government seeks to protect Americans from adverse economic events such as layoffs and illnesses, it is trying to achieve the economic goal of ________.
A)full employment
B)economic security
C)economic growth
D)economic equity
5
The main economic and social goals listed in the chapter were determined by __________.
A)the government
B)friends, relatives, community leaders, and elected government officials
C)economists
D)a panel of business experts
6
A __________ economy has five important characteristics: economic freedom, voluntary exchange, private property rights, the profit motive, and competition.
A)closed
B)free enterprise
C)command
D)traditional
7
A characteristic of capitalism is __________, the act of buyers and sellers freely and willingly engaging in market transactions.
A)government regulation
B)private property rights
C)voluntary exchange
D)tariffs
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