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Economics is the study of how society chooses to allocate its scarce resources. In a mixed economy, elements of both central planning and market resource allocation are used in allocating productive resources. The United States economy is a mixed economy, with a bias towards market allocation of resources. This means most resources are allocated in the private sector by means of markets. Discuss whether you favor a larger or smaller role of government in the economy. Refer to concepts found in the reading to support your opinion.

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Romarie Khazandra Marijuan
Romarie Khazandra MarijuanLv10
29 Sep 2019
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Principles of Economics
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Related questions

1. An economic system is

a. a set of institutional arrangements used to allocate scarce resources.

b. the movement of capital between countries.

c. how wealth is distributed and created in a country.

d. the natural resource available.

e. none of the above.

 

2. Contemporary economic change in Eastern Europe was preceded by

a. declining economic performance.

b. political change.

c. the withdrawal of Soviet backing.

d. all of the above.

 

3. Prior to the onset of economic reform in the late 1980s, the Soviet Union and most Eastern European countries allocated resources primarily by means of

a. Markets.

b. national economic plans.

c. neither a nor b.

d. both a and b.

 

4. Prices in the planned socialist systems were generally set by

a. supply and demand forces in the market.

b. the state.

c. external forces through international trade.

d. none of the above.

 

5. A major political change in the former planned socialist economies has been

a. the end of the political domination of Communist regimes.

b. the strengthening of the Communist regimes in combination with economic decentralization.

c. the full implementation of Western-style democracy.

d. all of the above.

 

6. The modern approach to defining economic systems

a. is based on the ”isms” of capitalism and socialism.

b. emphasizes resource allocation arrangements over incentive systems.

c. defines economic systems according to a number of characteristics.

d. states that defining economic systems is impossible.

e. none of the above.

 

7. The major attributes of an economic system are

a. its population and capital resources.

b. its level of GDP.

c. its level of GDP per capita.

d. its economic policies.

e. none of the above.

 

8. One very important characteristic of organizations in the comparing of economic systems is

a. the nature of economies of scale.

b. whether they exhibit capitalism or socialism.

c. the use of computers in the organization.

d. the level of centralization or decentralization of decisions.

e. none of the above.

 

9. A planned economy is one in which

a. subunits are coordinated by directives formulated by a superior agency.

b. subunits are not induced by appropriate incentives to carry out plan directives.

c. market allocation is combined with planned allocation.

d. a ministerial system prevails.

e. none of the above.

 

10. Ownership rights may affect economic outcomes because

a. public and private owners may have different time preferences.

b. public ownership may mean more attention to social rates of return.

c. the distribution of income is affected by ownership arrangements.

d. answers a and b are correct. e. answers a, b, and c are correct.

 

11. Which of the following would not be classified as an economic-environmental factor?

a. Natural resource endowments

b. The size of the economy

c. The nature of decision-making arrangements

d. The economy’s per capita income

e. The economy’s labor force

 

12. If one finds that the planned socialist economies all have higher growth rates than capitalist countries, this shows that

a. planned socialism necessarily produces higher growth than capitalism.

b. planned socialism may produce higher growth than capitalism, ceteris paribus.

c. capitalism may produce higher growth than planned socialism, ceteris paribus.

d. capitalism necessarily produces higher growth than planned socialism.

e. both b and c are correct.

 

13. National priorities tend to be

a. the same for countries that have similar economic systems.

b. the same for all countries.

c. different for different countries.

d. completely unknown.

e. none of the above.

 

14. Economic growth measures

a. the increase in nominal income.

b. the increase in the volume of output on either a total or a per capita basis.

c. the growth of efficiency.

d. the growth of productivity.

e. none of the above.

 

15. A measure of economic instability is

a. the unemployment rate.

b. the inflation rate.

c. the business cycle.

d. the Lorenz curve.

e. all except d are correct.

 

16. In the real world, most economic systems are in fact

a. centralized systems.

b. mixed systems.

c. market systems.

d. planned systems.

 

17. Although economic reform is difficult to characterize with precision, reform in planned socialist systems has typically been thought of as

a. revolutionary or abrupt in character.

b. occurring gradually over time.

c. successful in most cases.

d. none of the above.

 

18. In the United States, social security transfers as a percentage of the gross national product have

a. increased.

b. decreased.

c. remained the same.

d. fluctuated but with a significant downward trend.

 

19. In the industrialized capitalist systems, taxes as a percentage of the gross national product have

a. increased.

b. decreased slightly.

c. decreased greatly.

d. remained the same.

 

20. In contemporary capitalist economic reforms, privatization means

a. expansion of private ownership of the means of production.

b. improvement of planning methods.

c. implementation of worker management.

d. none of the above.

1. The high economic growth from the Industrial Revolution was characterized by

a. new opportunities to settle empty areas, particularly North America.

b. rapid technological and scientific innovation.

c. the expansion of national governments in Europe and North America.

d. a rapid increase in the accumulation of human and physical capital.

e. none of the above.

2. Periods of economic growth and prosperity can often be explained by

a. political paradigm shifts.

b. technological innovation

c. movement of capital

d. both a and b

e. both b and c

3. Prior to the onset of economic reform in the late 1980s, the Soviet Union and

most Eastern European countries allocated resources primarily by means of

a. markets.

b. national economic plans.

c. neither a nor b.

d. both a and b.

4. A major theme in the 1980s in the governments of England and the U.S.was

a. the appropriate role of government in the economy.

b. the pressure for expanding trade with former socialist block countries.

c. repressing inflation.

d. increasing employment opportunities.

e. none of the above.

5. One example of the expansion of internationalism in the 1990s was the development of a trade agreement between Canada, Mexico, and the United States. This agreement is known as

a. the GATT (General Agreement on Tariffs and Trade).

b. the IMF (International Monetary Fund).

c. the NAFTA (North American Free Trade Agreement).

d. the CMEA (Council for Mutual Economic Assistance).

6. The contemporary Chinese economy is of interest because

a. it combines central planning with a multiparty democratic political system.

b. it combines the market with a multiparty democratic political system.

c. it combines the market with a single-party political system.

d. none of the above.

7. In the analysis of the planned socialist economic systems, the concept of economic reform is usually referred to as

a. the replacement of the plan by the market after the collapse of the planning system.

b. the attempt to improve the operation of the planned economy without a significant shift toward market arrangements.

c. the frequent attempt, in the planned socialist economic systems, to introduce the industrial policy.

d. none of the above.

8. The modern approach to defining economic systems

a. is based on the €isms€ of capitalism and socialism.

b. emphasizes resource allocation arrangements over incentive systems.

c. defines economic systems according to a number of characteristics.

d. recognizes that defining economic systems is impossible.

e. none of the above.

9. Which of the following is not a major attribute of an economic system (Based on the textbook)?

a. Organization of decision-making arrangements.

b. Mechanisms for providing information and coordination.

c. Economic policies.

d. The system's physical and human capital.

e. Both c and d are correct.

10. A planned economy is one in which

a. subunits are coordinated by directives formulated by a superior agency.

b. subunits are not induced by appropriate incentives to carry out plan directives.

c. market allocation is combined with planned allocation.

d. a ministerial system prevails.

e. none of the above.

11. Property ownership rights include

a. disposition and utilization.

b. disposition, utilization, and the right to use the products and services generated.

c. disposition, utilization, and team production.

d. disposition, utilization, and economic incentives.

e. none of the above.

12. Consumer sovereignty means that

a. central planning is absent.

b. consumers elect public officials.

c. consumers make the basic decisions on what is to be produced.

d. consumers are not affected by advertising.

e. none of the above.

13. Which of the following is not a characteristic of market socialism?

a. Centralized decision-making.

b. Market allocation.

c. State or collective ownership.

d. Combination of moral and economic incentives.

e. All are characteristic of market socialism.

14. Two factors generally believed to be important in the analysis of levels of decision-making are

a. incentives and ownership.

b. authority and information.

c. level of economic development and ideological focus.

d. all of the above.

e. none of the above

15. Moral incentives generally refer to

a. direct money payments made to participants.

b. supplements to direct money payments, such as bonuses.

c. rewards that do not give the recipient greater command over goods and services but rather serve to reward desirable behavior.

d. all of the above.

e. none of the above

16. Principals and agents are different people. An agent is a party

a. who has controlling authority in an organization.

b. who acts on behalf of a principal.

c. with equity rights in the organization.

d. a and b are correct.

e. none of the above.

17. According to the text, opportunistic behavior occurs when a lower-level unit of an organization can use its information advantage against the interests of its superiors. This form of behavior, it is argued, can take two forms:

a. indicative planning and directive planning.

b. planners' preferences and consumer sovereignty.

c. moral hazard and adverse selection.

d. a and b are correct.

e. none of the above.

18. According to the text, there are two extremes of organizational structure. These extremes are termed

a. planned or market

b. corporate or individual proprietorship.

c. association based or hierarchy based.

d. a and c are correct.

e. none of the above.

19. It is often assumed that individuals who participate in the organized activity do so within the constraints of bounded rationality. The concept of bounded rationality

means that

a. individuals may not in fact pursue self-interest.

b. individuals face a variety of limitations, for example, in the ability to process information.

c. agents will never pursue goals or objectives set by principals.

d. b and c are correct

e. none of the above.

20. Modern comparative economists would object to the definition of economic systems only in terms of property ownership arrangements, because

a. they recognize that ownership arrangements are not important.

b. there is some private ownership of property in every economic system.

c. ownership arrangements are only one aspect of the economic system.

d. resource allocation procedures are much more important than property ownership.

e. all of the above.

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