Economics 20th Edition Mcconnell Test Bank

Economics 20th Edition McConnell Test
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Economics 20th Edition McConnell Test Bank
Chapter 02
The Market System and the Circular Flow
Multiple Choice Questions
1. Which of the following is a distinguishing feature of a command system?
A. Private ownership of all capital.

B. Central planning.
C. Heavy reliance on markets.
D. Widespread dispersion of economic power.
2. Which of the following is a distinguishing feature of laissez-faire capitalism?
A. Public ownership of all capital.

B. Central planning.
C. Minimal government intervention.
D. A circular flow of goods, resources, and money.
3. Examples of command economies are:
A. the United States and Japan.

B. Sweden and Norway.
C. Mexico and Brazil.
D. Cuba and North Korea.
2-1
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4. Of the following countries, which one best exhibits the characteristics of a market economy?
A. Canada.
B. Cuba.
C. North Korea.
D. Belarus.
5. The French term "laissez-faire" means:
A. "there is no free lunch."

B. "let it be."
C. "circular flow."
D. "public ownership."
6. An economic system:
A. requires a grouping of private markets linked to one another.

B. is a particular set of institutional arrangements and a coordinating mechanism used to respond
to the economizing problem.
C. requires some sort of centralized authority (such as government) to coordinate economic
activity.
D. is a plan or scheme that allows a firm to make money at some other firm's expense.
7. The term "laissez-faire" suggests that:
A. land and other natural resources should be privately owned, but capital should be publicly
owned.
B. land and other natural resources should be publicly owned, but capital should be privately
owned.
C. government should not interfere with the operation of the economy.
D. government action is absolutely necessary if the economy is to achieve full employment and full
production.
2-2
8. Economic systems differ according to which two main characteristics?
A. Who owns the factors of production and the methods used to coordinate economic activity.
B. The technology used in production and the quantity and quality of natural resources.
C. How goods are produced and who gets them.
D. The political system in place and the degree of scarcity facing the economy.
9. Command systems are also known as:
A. market systems.
B. pure capitalism.
C. laissez-faire capitalism.
D. communism.
10. A fundamental difference between the command system and laissez-faire capitalism is that, in
command systems:
A. the division of output is decided by central planning rather than by individuals operating freely
through markets.
B. all economic decisions are made by the government, whereas there is no government in laissez-
faire capitalism.
C. scarcity does not exist, whereas it does in laissez-faire capitalism.
D. money is not used, whereas it is in laissez-faire capitalism.
11. Which of the following is not a typical characteristic of a market system?
A. Private property.
B. Freedom of enterprise.
C. Government ownership of most property resources.
D. Competition in product and resource markets.
2-3
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Economics 20th Edition McConnell Test

The Market System and the Circular Flow

Multiple Choice Questions

1. Which of the following is a distinguishing feature of a command system?

A. Private ownership of all capital.

2. Which of the following is a distinguishing feature of laissez-faire capitalism?

A. Public ownership of all capital.

3. Examples of command economies are:

A. the United States and Japan.

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5. The French term "laissez-faire" means:

A. "there is no free lunch."

A. requires a grouping of private markets linked to one another.

7. The term "laissez-faire" suggests that:

9. Command systems are also known as:

11. Which of the following is not a typical characteristic of a market system?

The Foundation is committed to complying with the laws regulating

While we cannot and do not solicit contributions from states where

International donations are gratefully accepted, but we cannot make

Section 5. General Information About Project

Professor Michael S. Hart was the originator of the Project

Project Gutenberg™ eBooks are often created from several printed

This website includes information about Project Gutenberg™,

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