#1
Which of the following best describes a traditional economy?
Economic decisions are based on customs, traditions, and beliefs.
ExplanationCustoms and traditions dictate economic choices.
#2
In a market economy, what primarily determines what goods and services are produced?
Consumer demand and preferences
ExplanationConsumer demand shapes production decisions.
#3
In a free market economy, prices are primarily determined by:
Supply and demand
ExplanationPrices fluctuate based on supply and demand.
#4
Which economic system relies on supply and demand to determine production, distribution, and pricing of goods and services?
Market economy
ExplanationSupply and demand guide economic decisions.
#5
What is a characteristic of a mixed economy?
Both private enterprise and government involvement in economic activities
ExplanationCombination of private and government involvement.
#6
What is a common characteristic of all economic systems?
Scarce resources
ExplanationAll systems deal with limited resources.
#7
What is a key characteristic of a command economy?
Government ownership of resources and centralized planning
ExplanationGovernment controls resources and planning.
#8
Which economic system aims to minimize government intervention and maximize individual freedom?
Market economy
ExplanationIndividual freedom is prioritized with minimal government involvement.
#9
What is the primary role of the government in a mixed economy?
To regulate certain aspects of the economy while allowing market forces to operate
ExplanationGovernment regulates while market forces function.
#10
Which economic system is characterized by a blend of market forces and government intervention?
Mixed economy
ExplanationCombines market forces with government intervention.
#11
Which economic system is most commonly associated with socialist principles?
Command economy
ExplanationSocialist principles align with centralized control.
#12
What is a disadvantage of a traditional economy?
Lack of flexibility to adapt to changing circumstances
ExplanationInflexibility hinders adaptation to change.
#13
What is a major criticism of a pure market economy?
Unequal distribution of wealth
ExplanationWealth inequality is a significant issue.
#14
What is a primary advantage of a command economy?
Ability to quickly mobilize resources for national priorities
ExplanationRapid resource mobilization for national goals.
#15
Which economic system tends to have the highest level of income equality?
Command economy
ExplanationIncome distribution is more equal.