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In the former Soviet Union, the practice of people taking factory light bulbs to use in their homes was the result of: a)Shortage b)Scarcity What type of economic system does this happen in?

The situation where women tend crops and raise children while men hunt is often found in what type of economic system?

Since 2003, central planners of North Korea have a.increased restrictions on private ownership of resources b. established plans to completely open the economy to market forces c. relaxed restrictions on private ownership somewhat d. clamped down on all market activity in the economy

Resistance to the introduction of new farming methods is an attitude often found in what type of economy?

The economic decisions of central planners often are wrong because they have little understanding of…

Consumers "vote" by choosing a. a product over competing products b. a resource over other resources c. to become entrepreneurs d. to keep away from fad products

The most common economic system is a: a. traditional economy b. command economy c. market economy d. mixed economy

A society that has public schools and ownership of private property has elements of which two economic systems?

Elements of traditional, command, and market economies are combined in what type of economic system?

Freedom of economic choice is one of the chief advantages of what economic system?

What is free contract?

Which would be considered an automatic stabilizer? a. highway spending b. income tax c. military spending d. sales tax

Who funds public goods?

A public transfer payment happens when the government transfers income from a. donors to recipients who do not provide anything in return b. donors to recipients who provide something in return c. taxpayers to recipients who do not provide anything in return d. taxpayers to recipient who provide something in return

Define: Privatization & Nationalization

A circular flow model shows what?

In a factor market a. businesses are customers and individuals are producers b. individuals are customers and businesses are producers c. businesses sell productive resources d. individuals buy goods and services

What is the product market?

Producers decide allocation of goods based on…

Someone hiring a cashier is participating in what market?

How did the Great Depression affect the thinking of John Maynard Keynes and other economists? a. It caused them to adopt more laissez- faire policies. b. It caused them to advocate reductions in government spending. c. It caused them to advocate higher income tax rates. d. It caused them to favor government intervention in the economy.

Whose economic theory did Keynesian economics work to counteract? a. Alexander Hamilton b. Karl Marx c. Joan Robinson d. Adam Smith

What did Keynes consider the most influential part of his GDP equation; why? a. consumer goods because low consumer confidence worsened the Great Depression b. government goods because government spending is large part of the economy c. investment because it fluctuated and was linked to the spending multiplier effect d. net exports because they were related to a favorable balance of trade

What does the Laffer Curve do?

According to Milton Friedman, the Market should be allowed to operate freely…

ADVANTAGES: The three economic questions are clearly answered by custom There is little disagreement over economic goals DISADVANTAGES: They resist change They are less productive because of this Everything is based on custom so people aren’t always using their strengths They have a lower standard of living What type of market is represented by the chart above?

Explain both Demand- Side Economics and Supply-Side Economics

Demand-sideSupply-side Focus on increasing aggregate demand Decrease corporate taxes; cut the costs of production Tough to fix stagflation because fixing inflation and fixing unemployment require opposite policies Tough to evaluate the full impact of this because some supply- side policies also stimulate demand Increase spendingTrickle down theory Decrease taxes Democrats (however, they often look to increase taxes) Cut spending