Podcast
Questions and Answers
Which of the following is NOT a purpose of economic systems?
Which of the following is NOT a purpose of economic systems?
What is characteristic of a traditional economy?
What is characteristic of a traditional economy?
In a command economy, who decides what is produced?
In a command economy, who decides what is produced?
What is a potential disadvantage of a market economy?
What is a potential disadvantage of a market economy?
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Which of these describes a mixed economy?
Which of these describes a mixed economy?
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In which type of economy is there typically no unemployment?
In which type of economy is there typically no unemployment?
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Which economic system allows for individuals to own private property?
Which economic system allows for individuals to own private property?
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Which characteristic is least likely associated with a traditional economy?
Which characteristic is least likely associated with a traditional economy?
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Which characteristic is exclusive to a market economy?
Which characteristic is exclusive to a market economy?
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What is a primary drawback of a mixed economy?
What is a primary drawback of a mixed economy?
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Which statement best describes the role of government in a mixed economy?
Which statement best describes the role of government in a mixed economy?
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What distinguishes a command economy from a market economy?
What distinguishes a command economy from a market economy?
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Which aspect of a mixed economy benefits consumers the most?
Which aspect of a mixed economy benefits consumers the most?
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Study Notes
Economic Systems
- An economic system determines how a society uses its resources to provide goods and services and allows the society to make money.
- Economic systems are based on a society's tradition and values.
Economic Systems Answer Three Questions
- What to produce?
- How to produce?
- For whom to produce?
Types of Economic Systems
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Traditional Economy
- Based on tradition and customs.
- Focuses on agriculture.
- Found in rural areas of developing countries.
- Goods are made based on the needs of the community.
- Pros: No competition, easy to understand, few wasted resources.
- Cons: Little room for growth, limited technology, no extras.
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Command Economy
- All land and resources are controlled by the government.
- The government decides what is produced.
- The government decides the price of goods and services.
- Needs of society are more important than individual needs.
- Pros: Low unemployment, everyone's basic needs are met, few social classes.
- Cons: No incentive to work hard, consumers have no input.
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Market Economy
- No government control.
- People can own private property.
- Businesses are created and run by citizens.
- Supply and demand determines production and price.
- Supply: How much of a product is available.
- Demand: How much of a product is needed or wanted.
- Pros: Variety of goods, consumers can buy whatever they want, technology and innovation.
- Cons: Everyone's basic needs may not be met, wealth is not equal.
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Mixed Economy
- Includes qualities of a command and market economy.
- Businesses are privately owned.
- Public services are controlled by the government.
- Supply and demand determine the price of goods and services.
- Government intervenes to keep things fair.
- Pros: Employment, education, healthcare provided by government, consumers can buy what they want.
- Cons: High taxes, may not be as effective as a market economy.
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Description
Explore the fundamentals of economic systems in this quiz. Learn about the types, characteristics, and key questions that guide how resources are allocated in society. This quiz covers traditional and command economies, highlighting their pros and cons.
