Economic Systems

The three major economic systems are:

• Capitalism, Socialism, and Communism

• Capitalism, Feudalism, and Mercantilism

• Socialism, Communism, and Feudalism

• Mercantilism, Capitalism, and Socialism

Which of the following is not a major economic system?

• Traditional

• Command

• Market

• Industrial

What is one advantage of a Traditional economic system?

• High degree of consumer satisfaction

• Stable, predictable, and continuous life

• Decentralized decision making

• Rewards only productive resources

Which economic system is characterized by individual freedom for everyone?

• Traditional

• Command

• Market

What is a disadvantage of the Market economic system?

• Stagnation and lack of progress

• Lacks room for individual initiative

• Workers and businesses face uncertainty as a result of competition and change

• Lower standard of living

Which economic system is capable of dramatic change in a short time?

• Traditional

• Command

• Market

Fill in the blank: The Traditional economic system discourages new ideas and new ways of _________.

• doing things

• thinking

• communicating

• innovating

What do traditional societies use to answer the basic questions of WHAT, HOW, and FOR WHOM to produce?

• Technology

• Ritual, habit, or customs

• Government policies

• Market demand

A traditional economy is based on:

• industrial production

• technological innovation

• customs and traditions

• government planning

What is one advantage of traditional economies?

• A) High uncertainty on what to produce

• B) Everyone knows which role to play

• C) Rapid technological advancement

• D) High levels of innovation