Question 1

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 2

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 3

The freedom of consumers to cast their dollar votes to buy, or not to buy, at prices determined in competitive markets describes:

Accepted Answer

A)   socialism.
B)   communism.
C)   consumer sovereignty.
D)   the aspirations of Karl Marx.

Question 4

Which nation achieved the ideal communist society as described by Marx?

Accepted Answer

A)   Castro's Cuba
B)   Mao's China
C)   Stalin's Soviet Union
D)   No nation has achieved Marx's vision of communist society.

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. B

Question 6

Which of the following statements best describes the role played by prices in a command economy such as the former Soviet Union?

Accepted Answer

A)   Prices were used to allocate resources.
B)   Prices played the same role as in a market economy.
C)   Prices were used to ration final goods and services but not to allocate resources.
D)   Prices were not used at all.

Question 7

Who was one of the first proponents of employing market economies instead of command economies?

Accepted Answer

A)   Robert Heilbroner.
B)   Karl Marx.
C)   Jeffrey Sachs.
D)   Adam Smith.

Question 8

A classless society and economic system where all the factors of production are owned by workers and people share production according to their needs describes:

Accepted Answer

A)   capitalism.
B)   communism.
C)   the invisible hand.
D)   a mixed economy.

Question 9

The process of turning a government enterprise into a private enterprise is:

Accepted Answer

A)   marketization.
B)   entrepreneurship.
C)   nationalization.
D)   privatization.

Question 10

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 11

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

Accepted Answer

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

Question 12

Property rights allowing individuals to own goods, services, and factors of production are most important in:

Accepted Answer

A)   socialistic economies.
B)   planned economies.
C)   capitalistic economies.
D)   command economies.

Question 13

Which of the following is not a problem in the People's Republic of China following the economy's rapid growth?

Accepted Answer

A)   income inequality
B)   labor issues
C)   lack of potential for foreign trade because of China's comparative advantage in the production of all goods
D)   pollution C

Question 14

Proponents of a command economy argue that it promotes:

Accepted Answer

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

Question 15

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 16

Which of the following is true in a market economy?

Accepted Answer

A)   Central planners determine answers to the basic economic questions.
B)   Resources are used efficiently.
C)   The distribution of wealth is equal.
D)   Information for production and distribution decisions pass directly to buyers from the government.

Question 17

In a market economy:

Accepted Answer

A)   collective decision-making is more important than individual decision-making.
B)   goods and services are distributed as if by an "invisible hand" to those who can not afford them.
C)   profit provides an incentive to be productive.
D)   the distribution of wealth is equitably distributed.

Question 18

Which of the following statements is not one of the factors leading to the Russian economy transitioning toward capitalism?

Accepted Answer

A)   allowing private ownership of factors of production
B)   ability for individuals to earn profits
C)   allowing supply and demand to set higher prices for basic consumer goods
D)   restrictive regulations and licensing requirements for businesses

Question 19

The economic system characterized by private ownership of resources and market is:

Accepted Answer

A)   capitalism.
B)   communism.
C)   fascism.
D)   socialism.

Question 20

Which of the following applies to a real-world socialistic economy?

Accepted Answer

A)   private ownership of all factors of production
B)   government ownership of all factors of production
C)   government ownership of most of the factors of production
D)   lack of central planning

Exam 29: Economies in Transition

Socialism is an economic system characterized by:

Correct AnswerverifiedShow Answer

According to Adam Smith's invisible hand doctrine:

Correct AnswerverifiedShow Answer

The freedom of consumers to cast their dollar votes to buy, or not to buy, at prices determined in competitive markets describes:

Correct AnswerverifiedShow Answer

Which nation achieved the ideal communist society as described by Marx?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

Which of the following statements best describes the role played by prices in a command economy such as the former Soviet Union?

Correct AnswerverifiedShow Answer

Who was one of the first proponents of employing market economies instead of command economies?

Correct AnswerverifiedShow Answer

A classless society and economic system where all the factors of production are owned by workers and people share production according to their needs describes:

Correct AnswerverifiedShow Answer

The process of turning a government enterprise into a private enterprise is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedD

Property rights allowing individuals to own goods, services, and factors of production are most important in:

Correct AnswerverifiedShow Answer

Which of the following is not a problem in the People's Republic of China following the economy's rapid growth?

Correct AnswerverifiedC

Proponents of a command economy argue that it promotes:

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of capitalism?

Correct AnswerverifiedShow Answer

Which of the following is true in a market economy?

Correct AnswerverifiedShow Answer

In a market economy:

Correct AnswerverifiedShow Answer

Which of the following statements is not one of the factors leading to the Russian economy transitioning toward capitalism?

Correct AnswerverifiedShow Answer

The economic system characterized by private ownership of resources and market is:

Correct AnswerverifiedShow Answer

Which of the following applies to a real-world socialistic economy?

Correct AnswerverifiedShow Answer

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B

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D

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C

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