jjohnson@jpsonline.

org

http://mr-johnson.us

! Use Chapter 2 in your textbook to define the vocabulary terms and help you with the
answers to the questions.

Economics: Unit 2 Study Packet: Economic Systems

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A bit of advice: Finding the answers doesnt do you much good in the long run. Learning the information, on the other hand, will.

Vocabulary to know and love

Section 1
Economic System Traditional Economy Command Economy Market Economy

Section 2
Socialism Communism

Section 3
Private Property Rights Capitalism Competition Consumer Sovereignty Voluntary Exchange Laissez Faire

Section 4
Mixed Economy Global Economy Nationalize Privatize

Review questions to know and love

Section 1: Types of Economic Systems

1. What are the 3 basic questions ANY economic system seeks to answer?! 1. " 2. " 3.

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2. How does a traditional economy answer the 3 basic questions?" " " 3. How does a command economy answer the 3 basic questions?" " "

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4. How does a market economy answer the 3 basic questions?" " 5. Who controls the resources in each type of economy?" 1. Traditional:! 2. Command:! 3. Market:"

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6. What is the role of government in each type of economy?"

1. Traditional:! 2. Command:!

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3. Market:!

Section 2: Command Economic Systems

1. Who was Karl Marx and what problem was he trying to solve with the Communist Manifesto?" "

2. Why has extreme government control of the economy been used in attempts to create a Communist society in places like Russia, China, and North Korea?" "

3. Why do so-called Communist countries use authoritarian methods to maintain their economic and political systems? [Authoritarian = dictatorship; the government has all authority]! !

4. Compare the successes and failures of Communism in North Korea and China" "

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Section 3: Market Economic Systems

1. What are the 6 Traits of market economic systems?"

1. ________________. What does it mean? ____________________________________"

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2. ________________. What does it mean? ____________________________________"

3. ________________. What does it mean? ____________________________________"

4. ________________. What does it mean? ____________________________________"

5. ________________. What does it mean? ____________________________________"

6. ________________. What does it mean? ____________________________________! 2. Draw and label the Circular Flow for market economic systems." " " " " " " " " " " " " " 3. In what ways does self-interest serve the nature of a market economy?" " " " 4. What are the advantages of a market economy?" " " " 5. What disadvantages of a market economy call for government involvement?"
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Section 4: Modern Economies in the Global Age

1. Explain what it means to Nationalize an industry or business." " " " " " 2. Explain what it means to Privatize an industry or business.!

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3. In your opinion, are there some goods and services that should be publicly owned? Why or why not? [Be sure to give SPECIFIC examples]" " " " " " " 4. How does the global economy impact your life directly?" " " " " " " 5. How do global alliances benet the US economy?" " " " " " " " 6. Based on Figure 2.6 on page 62, what can you infer about the areas of the world where these products are manufactured?

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