Understanding Types of Economic Systems

What is the primary focus of a traditional economic system?

• Profit maximization

• Cultural customs and traditions

• Government control

• Technological advancement

In a command economic system, who primarily makes economic decisions?

• Private individuals

• The government

• Market forces

• Foreign investors

Which of the following is a characteristic of a liberal economic system?

• Limited competition

• Government ownership of resources

• Private ownership of resources

• Central planning

What is a key advantage of a command economic system?

• Encouragement of entrepreneurship

• Stability and control over the economy

• Rapid economic growth

• High levels of individual freedom

Which economic system is characterized by a mix of government and private sector involvement?

• Mixed

• Liberal

• Command

• Traditional

What is a disadvantage of a traditional economic system?

• Low effectiveness in production

• Rapid economic growth

• High levels of innovation

• Strong government regulation

In a liberal economic system, what is the role of the government?

• To intervene in market prices

• To control all economic activities

• To minimize intervention in the market

• To regulate all businesses

What is a potential drawback of a mixed economic system?

• Complete government control

• Lack of individual rights

• No competition

• Possibility of monopolies

Which of the following describes a characteristic of a command economy?

• Free market principles

• Government regulation of prices

• Private ownership of production

• High levels of competition

What is the main goal of a traditional economic system?

• Meeting basic needs

• Expanding global trade

• Encouraging innovation

• Maximizing profits