#1
Which economic system relies on the principle of laissez-faire?
Capitalism
ExplanationLaissez-faire principle advocates for minimal government intervention, characteristic of capitalism.
#2
What is a characteristic of a command economy?
Government control of resources
ExplanationCommand economy centralizes control of resources under government authority.
#3
In a market economy, prices are primarily determined by:
Supply and demand
ExplanationMarket economy prices are dictated by the forces of supply and demand.
#4
Which of the following is a characteristic of a traditional economic system?
Use of barter system
ExplanationTraditional economies rely on barter system for trade and exchange.
#5
Which economic system emphasizes the pursuit of profit and private ownership of resources?
Capitalism
ExplanationCapitalism prioritizes profit pursuit and private ownership of resources.
#6
In a mixed economy, who primarily determines resource allocation?
Market forces
ExplanationMixed economies allocate resources based on a combination of market forces and government intervention.
#7
What is a characteristic of a centrally planned economy?
Government control of resources
ExplanationCentrally planned economies feature government control over resources and production.
#8
Which of the following is an example of a cooperative business organization?
Credit union
ExplanationCredit unions are cooperative entities owned and operated by their members.
#9
What is a distinguishing feature of a corporation?
Limited liability for owners
ExplanationCorporations provide limited liability protection to their owners.
#10
What type of business organization has the advantage of pass-through taxation?
Limited liability company (LLC)
ExplanationLLCs enjoy pass-through taxation, passing profits and losses to owners.
#11
Which of the following is a characteristic of a partnership?
Unlimited liability for owners
ExplanationPartnerships expose owners to unlimited liability for business debts.
#12
Which type of corporation allows shareholders limited liability and centralized management?
C corporation
ExplanationC corporations provide shareholders limited liability and centralized management.
#13
What is a key feature of a sole proprietorship?
Limited liability
ExplanationSole proprietorships offer limited liability to their owners.
#14
What distinguishes an LLC from a corporation?
Pass-through taxation
ExplanationLLCs differ from corporations with their pass-through taxation structure.
#15
Which economic system prioritizes social welfare and equality?
Socialism
ExplanationSocialism emphasizes social welfare and equality in resource distribution.
#16
In which economic system does the government own the means of production?
Communism
ExplanationCommunism advocates for collective ownership of production means under government.
#17
Which economic system allows for a combination of government intervention and market forces?
Mixed economy
ExplanationMixed economy blends government intervention with market forces for resource allocation.
#18
Which economic system emphasizes collective ownership and control of the means of production?
Socialism
ExplanationSocialism advocates for collective ownership and control of production means.
#19
Which economic system encourages competition but also provides for some government intervention?
Mixed economy
ExplanationMixed economy fosters competition while allowing for government intervention.