Chapter#2 Test

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ECONOMICS

MR. MILEWSKI

FALL 2011

Chapter#2 Review

Know the following terms & ideas:

economic system traditional economy command economy market economy market economy advantage financial capital voluntary exchange inflation

CPI

PPI

Know the following concepts:

What are the strengths and weaknesses of a market economy?

What are the strengths and weaknesses of a command economy?

Give and examples of societies that are examples of traditional economies?

What type of economy recently collapsed in the communist bloc countries of Eastern Europe and the former Soviet

Union?

Who would you most likely find participating in a market economy?

What are the major economic and social goal of the United States?

Why are economic goals important?

Give examples of economic growth?

Why is economic growth an important goal of the United States?

Give examples of a trade-off among social and economic goals?

What are the characteristics of capitalism?

What is another term for a modified private enterprise economy?

Why are entrepreneurs important in a free enterprise economy?

How do consumers exercise their power in the American economy?

Who plays the roles of protector, consumer, regulator, and promoter of economic goals in the United States?

What is the purpose of government in a command economy?

Which group of people ultimately determines the products that a free enterprise economy produces?

T or F: A market economy does not provide for everyone's basic needs.

APPLYING SKILLS

Using Graphs: Study the graph.

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