Economics Today and Tomorrow

Chapter 19: Converging Economic Systems

Converging Economic Systems

1
Market capitalism operates on the basis of the three Ps, which are all of the following factors EXCEPT __________
A)profit.
B)price.
C)purchasing power.
D)private property.
2
Which of the following statements about pure capitalism is TRUE?
A)The four economic questions are decided by centralized planning.
B)There is no incentive for people to take business risks.
C)The major factors of production are owned by the state.
D)Those who take risks may be rewarded by higher profits.
3
Which of the following statements about socialism is NOT TRUE?
A)Socialist nations allow people to express their individuality.
B)Socialist economies do not foster initiative.
C)In pure socialism, most of the factors of production are owned by the state.
D)In socialist nations, most prices are set by the state, rather than by forces of supply and demand.
4
Which of the following statements about Karl Marx is NOT TRUE?
A)Marx believed that there was no need for government in a pure communist system.
B)Marx advocated revolution as the means by which workers should unite and overthrow capitalism.
C)Marx believed that when business owners kept the profits they made, they were taking money that rightly belonged to the proletariat.
D)Marx believed that the value of goods is determined by supply and demand.
5
Which statement comparing capitalism and socialism is NOT TRUE?
A)Income is equally distributed in both capitalist and socialist economies.
B)Capitalist economies are more efficient and have higher rates of growth than socialist economies.
C)Economic planning is required in both socialist and capitalist economies.
D)Capitalism provides more individual freedom than socialism.
6
Which of the following statements regarding the changes to China's economic system since World War II is NOT TRUE?
A)Immediately following China's civil war, the communists implemented an economic system based on five-year plans.
B)After 1958, when the national planning system was transformed into a regional planning system, economic conditions improved.
C)In 1978 the Chinese government attempted to motivate people to work harder by giving private individuals the right to rent land for 15-year periods.
D)Economic changes in the mid-1980s attempted to give managers of state-owned businesses more decision-making power than ever before.
7
Two major problems in China's attempt to move its economy toward capitalism are __________
A)population growth and incomplete property rights.
B)incomplete property rights and a lack of human rights.
C)incomplete property rights and a lack of the rule of law.
D)a lack of the rule of law and a lack of human rights.
8
Since privatization, the former Soviet Union has experienced all the following EXCEPT __________
A)demonstrations against market-capitalist reforms.
B)high prices on consumer goods due to competition in a market system.
C)a widely-used barter system.
D)low Russian taxes.
9
Sweden has initiated changes in its economic system to move from __________
A)welfare socialism to capitalism.
B)capitalism to welfare socialism.
C)welfare socialism to a combination of capitalism and welfare socialism.
D)communism to capitalism.
10
The most rapid move toward free markets in Latin America began in 1989 in __________
A)Venezuela.
B)Mexico.
C)Colombia.
D)Uruguay.
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