Free ENterprise Test Review

Match the following

• inflation

• the lowest legal wage that can be paid to most workers

  
  

• fixed income

• Federal health insurance program for senior citizens, regardless of income

• social security

• income that does not increase over time

• minimum wage

• A rise in the general level of prices and the loss of spending power

• medicare

• Federal program of disability and retirement benefits that covers most working Americans

  
  

Match the following

• Consumer Sovereignty

• The consumer has a role as the ruler of the market in determining the types of goods and services produced

• Mixed Economy

• : A free enterprise market economy where people carry on their economic affairs freely, but are subject to some government intervention and regulation

  
  

• Modified Free Enterprise System

• a risk-taking individual in search of profits

  
  

• Entrepreneur

• : Economic system that has some combination of traditional, command, and market economies

  
  

Match the following

• Voluntary Exchange

• an economic system in which privately owned businesses have the freedom to operate for a profit with limited government intervention

• Free Enterprise

• Fundamental feature of capitalism, which allows allows individuals to own and control their possessions as they wish

  
  

• Great Recession

• a severe economic downturn that lasted from 2007 through mid-2009;  US GDP dropped about 5%

  
  

• Biofuels

• fuel made from wood, peat, municipal solid waste, straw, corn, tires, landfill gases, fish oils, and other waste

  
  

• Private Property Rights

• Act of buyers and sellers freely and willingly engaging in market transactions; a characteristic of capitalism and free enterprise

  
  

An example of a free enterprise system at work is:

1. Opening a coffee shop

2. Starting an online business

3. Pursuing any career you have an interest in

4. All of the answers are correct

• 1. Opening a coffee shop

• 1. Starting an online business

• 1. Pursuing any career you have an interest in

• 1. All of the answers are correct

A free enterprise system:

• Involves lots of government regulation

• Places few restrictions on businesses

• Limits how consumers can make choices

• Makes it difficult to open a business

1. Americans place a high value on economic ____________.

• freedom

• compromises

• inflation

• interdependence

1. Which of the following does not provide protection from adverse events for Americans?

• Medicare

• Government Bonds

• Unemployment

• Social Security

1. True/False

2. If inflation occurs, workers need more money to pay for food, clothing, and shelter.

Answer explanation

True

1. The ___________ is a risk-taking individual in search of profits.

• Investor

• Consumer

• Entrepreneur

• Manufacturer

True or False:

In a mixed economy, people and businesses carry on their economic affairs freely, but they are subject to some government intervention.

Answer explanation

True