Chapter 1 Test Review: Economic Decisions and Systems

A command economy is when the government is in control.

• True
• False

Which of the following countries has a command economy?

• USA
• France
• N Korea
• Germany

In a command economy, individuals own the businesses.

• True
• False

A mixed economy is a combination of traditional and command economies and black markets.

• True 
• False

What is an economic system characterized by central authority that makes most of the major economic decisions? 

• traditional economy
• free enterprise 
• mixed economy
• command economy

What type of economy does the US have?

• mixed 
• command
• traditional
• market

In a market economy, ____________ decides what needs to be made.

• consumer
• producer
• the government
• everyone

How does a market economy work?

• divide and conquer
• supply and demand 
• hide and seek
• none of the above 

Which is an advantage for market economies?

• Incredible variety of goods and services
• work and businesses face uncertainty
• does not produce enough goods
• all of the above

Which is an advantage of a traditional economy?

• You get to try new ideas
• You don't get punished for anything.
• You get to do things the way your parents taught you
• No one has to do anything they don't want to.