PFL-E Unit 2 Exam

An _______ is a process adopted by a society for managing limited resources and addressing the questions of “What should be produced?”, “How should they be produced?”, and “Who should they be produced for?”

• economic system
• ecosystem
• political system
• legal system

A _______ system is an economic system based on the laws of supply and demand free of government intervention.

• Pure Market

• Communist
• Socialist
• Feudal

________ systems are based on state ownership and operation of all businesses.

• Capitalist
• Free-market
• Mixed economy
• Pure Command

_______ systems are based on a combination of private and public ownership.

• Capitalist
• Mixed

• Communist
• Anarchist

Under _______, resources are privately owned, and competition is allowed to flourish with a minimum of government interference.

• Socialism
• Communism
• Free Enterprise

• Fascism

A capitalistic free enterprise economy has five important characteristics: _______, voluntary exchange, private property rights, the profit motive, and competition.

• Government intervention
• Central planning
• Economic freedom

• Equal distribution of wealth

_______ are a mandatory payment collected by governments from individuals or businesses.

• Taxes
• Loans
• Dividends
• Profits

With _______, tax percentage increases as income increases. This results in a lower tax burden on lower income individuals.

• Progressive Tax
• Regressive Tax
• Proportional Tax
• Flat Tax

Regressive taxes are applied uniformly, which result in a _______ percentage of income from lower income earners than higher income earners.

• Higher
• Lower
• Equal
• None of the above

Some examples of _______ taxes are property taxes, sales taxes, and hotel taxes.

• National

• State

• Local

• Commonwealth