Economics
Chapter 2: Economic Systems
Name ____________________
1. What Four basic questions must all Economic Systems answer?
a. ____________________________________?
i. ___________________________ resources
ii. Must choose what to make and how much
b. _______________________________________?
i. By _____________________________________
c. _________________________________________?
i. Those with _____________________________
d. __________________________________________?
i. The _________________________________
ii. The _________________________________
iii. The _________________________________
e. How we answer these questions is determined by our economic system
2. What is a traditional economy?
a. Economy based on how ________________
_____________________________
b. Usually ________________________________________________
c. Communal
d. Characterized by the _________________________________
i. Exchange of goods and services ____________________
_____________
______________________________________________________
_ ____
e. Ex. ___________________________________________
3. What is a command economy?
a. Economic system in which __________________________________
________ ___________________________
______________________________________
b. Characterized by
i. _____________________________________ between businesses
ii. _______________________________________ economies
1. Government planners distribute ______________
___________
c. Three Versions of Command Economy:
i. _____________________________________
ii. _____________________________________
iii. _____________________________________
4. What is a national socialist economy?
a. _______________ economic system that _________________
i. But Gov. directs economy
ii. Nazi Germany allowed companies to _________________
__________ ___________________
______________________________________
iii. ____________________________________________
1. Total government _____________
_______________________
2. ________________________________________________
b. Economic system of ___________________________________
5. What is Democratic Socialism?
a. ______________________________ economic system in which the
government is ______________________________________________
i. Usually ___________ ___________________________________
1. ________________
___________________________________
________________________________________________
____
2. ________________________________ are usually free
ii. Sometimes called a
“_______________________________________”
b. Citizens enjoys ________________________________
_________________
i. Examples:
________________________________________________
6. What is Communism?
a. Economic system based on writings of _________________________
i. _________________________ economic system in which
____________ _____________
______________________________________________
1. _________________________________
2. ________________________________ among businesses
3. ________________________________ of business
ii. Claims to _________________________________________
_______ _ ___________________________ by owners
b. ______________________________________dictatorship
1. Total government
_____________________________________
2. _______________________________________
ii. ______________________________________________
7. What is a market economy?
a. Economic system where people ______________________________
_________
_____________________________________________________________
____
b. Also known as
i. ______________________________________
ii. ______________________________________
c. Economic system of _____________________________
d. Based on the writings of _____________________________________
i. Said economy controlled by an
“_______________________________”
8. What is the “Invisible Hand”?
a. People make _________________________________
_____________________
i. Motivated to _______________________________________
ii. Consumers purchase the
______________________________________
b. Business __________________________________________
i. This ____________________________________
___________________
c. _________________________________
i. Literally “__________________________________________”
ii. Smith believed that the
_______________________________________
______________________________________________________
____
Homework: In a well thought out paragraph, does this poster support
capitalism? Explain.