Economy quiz 1 ch.5-7

Economic Leveling

A policy of equal distribution of the nation’s income is called __________.

Input

This question asks, how will the nation’s goods be produced?

Karl Marx

He is called the Father of Communism.

Stable

A goal of most nations is to have a ______ price level.

Consumer goods

A type of goods of which the following are examples: shoes, coffee, tablets, and books

Capital

This kind of good is used to produce other goods.

Workfare

Welfare for which one must work has been called ________.

Fairness

Egalitarian ________ holds that every person deserves an equal portion of the nation’s wealth.

Unemployment

An economic goal for which most nations strive is a low level of __________.

Distribution

This question asks, who receives what the nation produces?

Growth

An economic goal of every nation is a good rate of economic ________.

Libertarian

___________ fairness argues that a person’s income should depend on how well he satisfies others’ wants.

Capital intensive

The term denotes a firm that relies more on equipment than on human labor.

Command

A type of economy in which an individual or committee answers the three basic economic questions

Economic Darwinism

The libertarian concept of fairness has been dubbed “__________________”

Market

A type of economy in which individuals answer the three basic economic questions

Guns and butter

Name of an illustration of the trade-off between consumer goods and capital goods

Extensive

This is the type of economic growth that comes from employing more resources.

The Communist Manifesto

Karl Marx’s book was called _____________.

Price

Inflation occurs in an economy when the ________ of a good rises.

Work

“If any would not ________, neither should he eat.”

Output

This question asks, what will be produced?

Save

The choice that exists between producing consumer goods and capital goods is really a choice between whether to spend or _____.

Social democracy

transitional economic system between free markets and governmental ownership

Privatization

The government sells businesses back to private individuals.

Capitalism

economic system characterized by private ownership and decision making

Classic liberal capitalism

Adam Smith’s ideal economic system

Communism

Government is no longer necessary since everyone is acting in the best interest of others.

Welfare state

economic system that leans toward capitalism but has extremely high taxes

Mercantilism

Gold and silver in the government’s treasury are what is important.

Nationalization

The government takes possession of key industries.

Socialism

A central authority controls resources and makes economic decisions.

State capitalism

private ownership of businesses but with frequent governmental intervention

In what year did mercantilism end in America?

C. 1776

Which of the following was not one of the strategies of mercantilism?

B. refuse to sell goods and services to foreign nations

What does laissez-faire mean?

D. let alone

Which of the following is not one of the distinguishing characteristics of a capitalistic economy?

A. Workers decide all questions of policy for their particular business.

According to AdamSmith, why do the butcher and baker provide our dinner?

A. because it is in their own best interest to do so

In which of the following economic systems does the government not exist?

c. pure communism

Over which of the following would a social democracy be least likely to assume control?

D. a shoe factory

favorable

A ___________ balance of trade is said to exist when a nation sells more goods and services than it purchases.

The Wealth of Nations

In his book __________________, Adam Smith refuted the economic policies of mercantilism.

Class struggle

According to Karl Marx, “The history of all hitherto existing society is the history of _____________.”

To acquire new supplies of the factors of production. The motherland would use the new raw materials to produce goods that competing nations could not.

Why did mercantilism promote colonization?

The misconception that money is wealth; it only enables a person to purchase wealth.

According to Adam Smith, what was the root problem with mercantilism?

1 To protect its citizens from foreign aggression.

2 To protect the rights of its citizens from infringements by others.

3 To provide public goods.

According to Adam Smith, what are the three principal functions of government?

Public goods are goods and services that benefit all or nearly all of a nation’s people and that private firms or individuals would not choose to produce because they could not do so profitably (eg, highways). Public goods are necessary goods that, if not provided by the government, would not be available, would be available but not affordable, or would be available but not consistently reliable.

In your own words, define a public good and give an example of one. Why do public goods often become the responsibility of the government?