Economic Systems (Unit 5)

What are the three questions every country must answer when developing its economic plan?

• What goods/services will be produced? How will goods/services be produced? Who will consume the goods/services?

• What is the population? How much money is needed? Who will pay taxes?

• What are the natural resources? How will they be distributed? Who will manage them?

• What is the climate? How will it affect production? Who will benefit from it?

What determines the kind of economic system a country will have?

• The way a country answers the three economic questions

• The country's population size

• The country's geographical location

• The country's political system

In a traditional economy, what are economic decisions based on?

• Modern technology

• Customs, traditions, and beliefs of the past

• Government policies

• Market trends

What is bartering?

• Trading using money

• Trading without using money

• Trading with digital currency

• Trading with credit cards

In a traditional economy, what do people typically make?

• New inventions

• What they always made and what their parents did

• High-tech gadgets

• Imported goods

Where can traditional economies still be found?

• Large urban cities

• Small tribes in northern Russia

• Major industrial countries

• Online marketplaces

What type of economic system answers the three economic questions through strict government control?

• Market

• Command

• Mixed

• Traditional

In a command economy, who regulates the prices of goods, wages of workers, and goods to be made?

• Private companies

• Consumers

• The government

• International organizations

Why are there no pure command countries in the world today?

• They are too expensive to maintain.

• They are very harsh to live under.

• They are too democratic.

• They are too small in size.

Which of the following countries is NOT mentioned as having a command government?

• Former Soviet Union

• Former East Germany

• North Korea

• Japan