Economic Systems

Producers determine supply. Consumers determine demand. Companies seek profits. Which economic system is described above?

• Traditional Economy
• Free Enterprise Economy
• Socialist Economy
• Communist Economy

In Indonesia, the government owns large industries and sets some prices. Private individuals also do business. Which economic system is described above?

• Traditional
• Free Enterprise
• Socialist
• Communist

Which is the central characteristic of a free market economy?

• The government owns the means of production
• All wage earners are paid the same amount
• Labor unions are prohibited
• Businesses are driven by the desire for profits

In which economic system would you expect the widest selection of consumer goods?

• Traditional
• Free Enterprise
• Socialist
• Communist

In a traditional economy, information about the way goods are produced is passed from one generation to the next by the –

• family
• legal system
• public schools
• government

Which is the major feature of an economy based on subsistence farming?

• Most adults work outside the home
• Farmers compete with each other
• Farmers raise just enough crops for their family to survive
• The government decides which crops should be grown

Which group has the greatest influence in determining what goods and services will be produced in a communist economic system?

• farmers
• government officials
• consumers 
• business leaders

In a socialist economic system, the government –

• has little say in what goods are made
• does not influence the distribution of goods and services
• guarantees all consumers a high income
• often owns major businesses

Which statement describes an aspect of a traditional economy?

• Profit motivates individuals to set up private businesses
• The interplay of supply and demand regulates prices
• Tradition and customs greatly influence economic decisions
• Government directs and controls the means of production

Which forces play the greatest role in determining the distribution of goods and services in a free enterprise economic system?

• court rulings and expert opinions
• government officials and military needs
• producer supply and consumer demand
• village elders and community tradition