Economic Systems and Market Model Quiz

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Which system is a mix of decentralized decision-making with some government control?

Circular Flow System

Command System

Market System (correct)

Invisible Hand System

Which system emphasizes private markets as the dominant force?

Market System (correct)

Laissez-Faire Capitalism

Invisible Hand System

Circular Flow System

What is encouraged in the Market System to drive innovation?

Geographic specialization

Decentralized decision-making

Division of labor

Advanced technology and capital goods (correct)

Which economic system promotes specialization and a division of labor?

Market System Signup and view all the answers

Which system is characterized by decisions made by a central planning board?

Command System Signup and view all the answers

Which system is associated with self-interested behavior and competition?

Laissez-Faire Capitalism Signup and view all the answers

What is the main coordinating mechanism in the market system?

Decentralized use of markets and prices Signup and view all the answers

Which economic system advocates for keeping the government from interfering and emphasizes protection of private property?

Capitalism Signup and view all the answers

What concept refers to the theory that individuals pursuing their own self-interest end up benefiting society as a whole?

Invisible Hand Signup and view all the answers

In the circular flow model, what flows from households to firms?

Labor and capital Signup and view all the answers

Which system is characterized by government ownership of resources?

Command System Signup and view all the answers

What distinguishes the market system from the command system in terms of decision-making?

Decentralized use of markets and prices Signup and view all the answers

What is the hypothesis of creative destruction?

The creation of new products and production methods destroys the market power of existing monopolies. Signup and view all the answers

Which concept is associated with the tendency of competition to promote the interests of society unintentionally?

Unity of private and social interest Signup and view all the answers

What is the premise behind the invisible hand concept as described in the text?

Competition leads to unintentional promotion of societal interests. Signup and view all the answers

What does the text suggest about command systems?

They fail to deliver adequate goods and services. Signup and view all the answers

Which term is associated with the idea of individuals pursuing their own interests benefiting society collectively?

Laissez-faire Capitalism Signup and view all the answers

In the context of market systems, what does 'Unity of private and social interest' refer to?

Balancing individual actions with societal benefits. Signup and view all the answers