Chapter 1, Lesson 3 - Role of Government in Economic Systems

Reorder the following based on the level of economic freedom (first = most freedom and last = least amount of freedom)

• Mixed-market Economy

• Socialism

• Communism

• Pure capitalism

What is the government's role in each economic system?

• Decides what to produce, how much and how to distribute what is produced

• Socialism

• None

• Communism

• Determine use of resources, distribute products and wages

• Capitalism

To what degree does the government get involved in each of the following economic systems?

• Complete involvement (Command Economy)

• Communism

• None (Free Market Economy)

• Capitalism

• Significant involvement

• Socialism

The United States is best described as an example of a(n)...

• pure capitalist economy

• mixed-market economy

• socialist economy

• communist economy

Economic system that emphasizes freedom of choice and individual incentive

• capitalism

• socialism

• laissez-faire

• communism

Meaning "to let alone" or "let it be"; this is an essential element of capitalism.

• free market

• bourgeoisie

• laissez-faire

• proletariat

Economic system in which buyers and sellers make free choices in the marketplace.

• free market

• bourgeoisie

• laissez-faire

• proletariat

Economic system that combines elements of capitalism and socialism; generally the government plays only a small role in the economy.

• free market economy

• mixed-market economy

• socialism

• communism

Economic system in which the government owns the basic means of production, distributes the products and wages, and provides social services, such as health care and welfare.

• free market economy

• mixed-market economy

• socialism

• communism

The central government directs all major economic decisions.

• free market economy

• mixed-market economy

• socialism

• communism