Question 1

The economic system that answers the What , How and For Whom questions using prices determined by the interaction of supply and demand is a:

Accepted Answer

A)  market economy.
B)  command economy
C)  soviet economy.
D)  traditional economy.

Question 2

Adam Smith believed that the pursuit of the public interest is also the best way to promote the private self interest.

Accepted Answer

A) True 
 B)False

Question 3

A market system does not operate based on self-interest.

Accepted Answer

A) True 
 B)False

Question 4

Adam Smith's book, The Wealth of Nations , was published at the time of the:

Accepted Answer

A)  War of 1812.
B)  U.S. Declaration of Independence.
C)  U.S. Civil War.
D)  Great Depression.

Question 5

The economic system in which the basic economic questions are answered through markets with some government intervention is a:

Accepted Answer

A)  command economy.
B)  mixed economy.
C)  market economy.
D)  planned economy.

Question 6

Adam Smith's book The Wealth of Nations was published at the time of the:

Accepted Answer

A)  Great Depression.
B)  U.S. Declaration of Independence.
C)  U.S. Civil War.
D)  War of 1812.

Question 7

What is the difference between socialism and communism? What are some examples of countries that are largely socialistic and some that are communistic?

Accepted Answer

Communism is a socialist economic system...

Question 8

Which of the following is a characteristic of capitalism?

Accepted Answer

A)  Equality of income.
B)  Government decision-making is preferred to decentralized decision-making.
C)  Market determination of prices and quantity.
D)  Government ownership of all capital.

Question 9

Adam Smith argued that government should actively intervene in market to improve economic performance.

Accepted Answer

A) True 
 B)False

Question 10

What famous economist said, "By pursuing his own interest he (an individual) frequently promotes that of the society more effectually than when he really intends to promote it?"

Accepted Answer

A)  Alfred Marshall.
B)  Adam Smith.
C)  Karl Marx.
D)  Robert L. Heilbroner.

Question 11

An economic system characterized by private ownership of the factors of production and economic activity coordinated through a system of markets and prices is called:

Accepted Answer

A)  capitalism.
B)  socialism.
C)  communism.
D)  none of these.

Question 12

One of the strengths of a socialist economy, according to those who advocate such a system, is that government intervention will enable a more equitable distribution of income.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true ?

Accepted Answer

A)  The United States today comes closer to the socialist form of economic organization than it does capitalism.
B)  When central planners set prices above equilibrium for goods and services they create shortages.
C)  According to Karl Marx, under capitalism, workers would be exploited and would revolt against the owners of capital.
D)  Adam Smith argued that government's role in society would be to do absolutely nothing.

Question 14

Government involvement has become so prevalent in the U.S. economy that the U.S. economy is now generally considered to be a socialist economy.

Accepted Answer

A) True 
 B)False

Question 15

Karl Marx's massive work, titled Das Kapital , was published in 1848.

Accepted Answer

A) True 
 B)False

Question 16

In the former Soviet economy, the supreme planning board that transmitted economic decisions down to producing and consuming units was called the:

Accepted Answer

A)  Soviet Ministry.
B)  Polit Bureau.
C)  Gosplan.
D)  Soviet Central Committee for Economic Planning.

Question 17

Proponents of a command economy argue that it promotes:

Accepted Answer

A)  efficiency.
B)  equity.
C)  consumer sovereignty.
D)  economic growth.

Question 18

Socialism is an economic system characterized by:

Accepted Answer

A)  private ownership of resources and market decision-making.
B)  government ownership of resources and centralized decision-making.
C)  cooperation, sharing, and little central government.
D)  a complex structure of rules and traditions that dictates decision-making.

Question 19

According to Adam Smith's invisible hand doctrine:

Accepted Answer

A)  self-interest best serves the interests of society.
B)  laissez faire must be improved by government intervention.
C)  producers should serve the best interests of society.
D)  only laissez faire mercantilism best serves the interests of society.

Question 20

In a socialistic system, most economic decisions are made by:

Accepted Answer

A)  firms.
B)  consumers.
C)  stockholders.
D)  government planners.

Exam 19: Economies in Transition

Karl Marx's massive work, titled Das Kapital , was published in 1848.

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What famous economist said, "By pursuing his own interest he (an individual) frequently promotes that of the society more effectually than when he really intends to promote it?"

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The economic system in which the basic economic questions are answered through markets with some government intervention is a:

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Adam Smith's book, The Wealth of Nations , was published at the time of the:

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Which of the following statements is true ?

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In the former Soviet economy, the supreme planning board that transmitted economic decisions down to producing and consuming units was called the:

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Adam Smith's book The Wealth of Nations was published at the time of the:

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Socialism is an economic system characterized by:

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Proponents of a command economy argue that it promotes:

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What is the difference between socialism and communism? What are some examples of countries that are largely socialistic and some that are communistic?

Correct AnswerverifiedCommunism is a socialist economic system...View AnswerShow Answer

The economic system that answers the What , How and For Whom questions using prices determined by the interaction of supply and demand is a:

Correct AnswerverifiedShow Answer

An economic system characterized by private ownership of the factors of production and economic activity coordinated through a system of markets and prices is called:

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According to Adam Smith's invisible hand doctrine:

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Adam Smith believed that the pursuit of the public interest is also the best way to promote the private self interest.

Correct AnswerverifiedShow Answer

Adam Smith argued that government should actively intervene in market to improve economic performance.

Correct AnswerverifiedShow Answer

A market system does not operate based on self-interest.

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of capitalism?

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In a socialistic system, most economic decisions are made by:

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One of the strengths of a socialist economy, according to those who advocate such a system, is that government intervention will enable a more equitable distribution of income.

Correct AnswerverifiedShow Answer

Government involvement has become so prevalent in the U.S. economy that the U.S. economy is now generally considered to be a socialist economy.

Correct AnswerverifiedShow Answer

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Communism is a socialist economic system...
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