1.2: Economic Systems

Each of the following is a characteristic of capitalist economic systems, except:

• Profit incentives

• Free markets

• Private property protections

• Public ownership

An economic system based on public ownership and state management of capital resources.

• Capitalism

• Socialism

• Traditionalism

• Free Markets

Each of the following countries has a Communist-led government and socialist economy, except:

• China

• Cuba

• Vietnam

• India

Each of the following is an example of state planning as a driver of economic activity under capitalism, except:

• Military defense

• Education

• Universal healthcare

• Restaurants

Organize these options into the right categories

Groups:

(a) Laissez Faire

,

(b) Welfare State

• Graduated/ progressive taxes

• Few to no regulations

• Flat/ regressive taxes

• Free markets only

• Public education

• Social security programs

• Unemployment benefits

• Sink or swim

• Minimal state involvement

• Universal healthcare

​ (a)   , the economic system of the U.S. and much of the world, involves the ​ (b)   ownership of capital resources and their operation for the ​ (c)   of the owners. This system is praised for contributing to economic growth and development, but is sometimes criticized for ​ (d)   and instability.

• Capitalism
• private
• profit
• inequality
• socialism
• public
• use
• fairness

​ (a)   , an economic system found in countries with ​ (b)   -led governments, such as China, ​ (c)   , and Vietnam, is based on ​ (d)   ownership of capital resources and their management by the community through some combination of ​ (e)   and regulated markets. It is praised for rapid development and equality, but can also be criticized for limiting certain rights in property.

• Socialism
• Communist
• Cuba
• public
• state planning
• Capitalism
• Australia
• private
• free markets

Match the following

• State Planning

• Economic system based on private ownership of capital, operated for the owners' profit

• Free Markets

• Economic exchanges driven purely by profit-seeking, with prices determined through supply and demand

• Socialism

• Economic exchanges driven by state incentives and penalties to fulfill established goals

• Capitalism

• Economic policy in which the government plays little to no role in managing the economy

• Laissez Faire

• Economic system based on public ownership of capital, operated for community use

In the 20th century, the Soviet Union and Eastern European states were examples of what economic system?

• Laissez faire socialism

• Command-based socialism

• Market-based socialism

• Command-based capitalism

Today, the People's Republic of China illustrates the concept of:

• Socialism with markets and state-planning

• Socialism driven only by markets

• Socialism driven only by state-planning

• Capitalism driven only by markets