Economic Systems: Market, Command, and Mixed Economies

Question 1

Which of the following is NOT a defining characteristic of a market economy?

Accepted Answer

Central planning by the government

Answer

Private ownership of property

Answer

Freedom of choice for consumers and producers

Answer

Government intervention to correct market failures

Question 2

In a command economy, which entity holds the primary decision-making authority over resource allocation?

Accepted Answer

The government

Answer

Consumers

Answer

Producers

Answer

International organizations

Question 3

In a command economy, what is the primary purpose of fiscal policy?

Accepted Answer

To allocate resources according to central planning

Answer

To regulate economic activity

Answer

To control inflation

Answer

To provide social welfare

Question 4

Which characteristic is NOT a feature of a market economy?

Accepted Answer

Government intervention

Answer

Supply and demand

Answer

Private property

Question 5

Which of the following real-world examples best demonstrates the benefits of a market economy, such as competition and consumer choice?

Accepted Answer

The United States economy

Answer

The Cuban economy

Answer

The economy of North Korea

Question 6

What is the best definition of an economic system?

Accepted Answer

A system that governs the production, distribution, and consumption of goods and services.

Answer

A way to set prices for goods and services in an economy.

Answer

A system that distributes wealth and resources in a society.

Answer

A set of rules that control economic activities.

Question 7

In mixed economies, which of these is a key characteristic?

Accepted Answer

Government involvement in economic decision-making

Answer

Unrestricted free market competition

Answer

Centralized planning of economic activities

Answer

Complete public ownership of industries

Question 8

Which of the following is NOT a characteristic of a market economy in the United Kingdom?

Accepted Answer

Minimum government intervention

Answer

Private ownership of resources

Answer

Profit motive

Answer

Price determination through supply and demand

Question 9

In a command economy, who is responsible for making the majority of economic decisions?

Accepted Answer

Government

Answer

Consumers

Answer

Businesses

Answer

Unions

Question 10

Which type of economic system combines elements of both market and command economies within the UK context?

Accepted Answer

Mixed economy

Answer

Traditional economy

Answer

Subsistence economy

Answer

Capitalist economy

Question 11

What is the primary goal of the Bank of England's monetary policy?

Accepted Answer

To maintain price stability (control inflation)

Answer

To promote economic growth

Answer

To stabilize the financial system

Answer

To reduce unemployment

Question 12

How are microeconomics and macroeconomics different?

Accepted Answer

Microeconomics focuses on individual markets, while macroeconomics examines the economy as a whole.

Answer

Macroeconomics concentrates on individual markets, whereas microeconomics analyzes the economy as a whole.

Answer

Microeconomics concerns long-term trends, whereas macroeconomics addresses short-term fluctuations.

Answer

Macroeconomics focuses on long-term developments, while microeconomics considers short-term fluctuations.

Question 13

Which of the following measures the overall price level in the UK economy?

Accepted Answer

Consumer Prices Index (CPI)

Answer

Gross Domestic Product (GDP)

Answer

Unemployment Rate

Answer

Interest Rate

Question 14

In a command economy, what is the primary goal of economic decision-making?

Accepted Answer

Achieving social equality

Answer

Maximizing consumer satisfaction

Answer

Maintaining overall economic stability

Answer

Increasing overall economic efficiency

Question 15

Which of the following is NOT a characteristic of a mixed economy?

Accepted Answer

Exclusive reliance on free market principles

Answer

Government intervention in some markets

Answer

Coexistence of private and public ownership

Answer

Regulation to address market failures

Question 16

In a market economy, how do prices play a crucial role in resource allocation?

Accepted Answer

They signal scarcity and guide production decisions

Answer

They determine the distribution of income and wealth

Answer

They regulate consumer behavior and demand

Answer

They ensure fair competition among producers

Question 17

What is a key difference between a mixed economy and a purely market economy?

Accepted Answer

The extent of government involvement in economic decision-making

Answer

The level of economic freedom enjoyed by individuals

Answer

The degree of competition in the marketplace

Answer

The overall size of the public sector

Question 18

Which of the following is NOT a potential advantage of a mixed economy?

Accepted Answer

Eliminating all economic problems

Answer

Combining the benefits of both market and command systems

Answer

Providing a safety net for vulnerable populations

Answer

Promoting economic stability and reducing inequality

Question 19

What is a fundamental characteristic of a centrally planned economy?

Accepted Answer

Centralized decision-making by a government authority

Answer

Emphasis on individual economic freedom

Answer

Privatization of major industries

Answer

Minimal government regulation

Question 20

Which is the main advantage of government intervention in the economy?

Accepted Answer

Corrects market imperfections

Answer

Guarantees endless economic growth

Answer

Eliminates government influence in the economy

Question 21

When a command economy shifts to a market economy, which of the following typically emerges as a major obstacle?

Accepted Answer

Job losses and unemployment

Answer

Enhanced economic growth

Answer

Diminished government influence

Answer

Optimized resource distribution

Question 22

In a mixed economy, what is a primary purpose of government intervention?

Accepted Answer

Promote economic growth and stability

Answer

Eliminate private sector involvement

Answer

Control all economic decisions

Answer

Withdraw government involvement completely