Economic Systems Review

Directions: Fill each big, empty circle in with the correctly corresponding economic system from the list below.

BARTER SYSTEM

CAPITALISM TRADITIONAL ECONOMY

MIXED ECONOMY COMMAND ECONOMY

MANOR ECONOMY MERCANTILISM

1

SIMPLE ECONOMY BASED ON SELF- SUFFICIENT FARMING; ALSO KNOWN AS SUBSISTENCE FARMING USED BY EARLY CIVILIZATIONS

2

INCLUDES BOTH PRIVATE AND STATE (GOV’T) – RUN ENTERPRISES; OFFERS MORE CHOICES THAN A REGULAR COMMAND ECONOMY (HAS ELEMENTS OF A COMMAND ECONOMY AND CAPITALIST ECONOMY)

CHINA HAS USED THIS SYSTEM SINCE THE LATE 1970’S WHEN DENG XIAOPING BECAME THE LEADER

3

ECONOMY REVOLVES AROUND A LORD’S ESTATE; PEASANTS AND SERFS EXCHANGE GOODS WITH THE LORD FOR PROTECTION; NEARLY SELF-SUFFICIENT

USED IN EUROPE DURING THE MIDDLE AGES (MEDIEVAL PERIOD)

4

COUNTRIES SEEK TO EXPORT MORE THAN THEY IMPORT TO BUILD GOLD AND SILVER SUPPLY; COLONIES RESTRICTED TO TRADING WITH PARENT COUNTRY

COMMON ECONOMIC SYSTEM OF COLONIAL ERA EUROPEAN COUNTRIES

5

GOVERNMENT OFFICIALS, THROUGH CENTRAL USED BY THE SOVIET PLANNING, MAKE ALL UNION, CHINA UNDER BASIC ECONOMIC MAO ZEDONG & OTHER DECISIONS, SUCH AS WHAT COMMUNIST COUNTRIES WILL BE PRODUCED WHEN SUCH AS NORTH KOREA AND WHERE AND CUBA

THE GOVERNMENT ALSO KNOWN AS A OWNS THE MEANS PLANNED ECONOMY OF PRODUCTION (FACTORIES, ETC), DISTRIBUTION AND EXCHANGE

6

“FATHER” IS COLONIAL ERA ECONOMIST ADAM PRIVATE BUSINESSES AND SMITH (WROTE INDIVIDUALS MAKE BASIC WEALTH OF ECONOMIC DECISIONS NATIONS) INCLUDING WHAT, BANKS AND STOCK WHERE, HOW MUCH AND EXCHANGES PLAY A AT WHAT PRICES GOODS ROLE BY WILL BE PRODUCED PROVIDING CAPITAL (MONEY

USED TO INVEST)

COMPETITION PROMOTES PRICES ARE HIGH QUALITY DETERMINED BY AND LOW THE FORCES OF PRICES SUPPLY AND DEMAND

PROPERTY, INCLUDING ALSO KNOWN AS: THE MEANS OF - “FREE MARKET” ECONOMY (OR PRODUCTION JUST ‘MARKET’) (FACTORIES, ETC…), IS PRIVATELY OWNED - “FREE ENTERPRISE”

- IF WITH MINIMAL GOVERNMENT INTERFERENCE, LAISSEZ-FAIRE

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People exchange services and goods for other services and goods in return.

Used for centuries before money was invented.

1 One principle in the theory of mercantilism is that colonies should be

1. granted independence as soon as possible 2. considered an economic burden for the colonial power 3. encouraged to develop their own industries 4. acquired as markets and sources of raw materials

2 Which statement best describes how a command economy functioned in the Soviet Union?

1. The laws of supply and demand controlled the economy. 2. Trade policies mandated that imports exceed exports. 3. The success of the agricultural sector controlled the price of manufactured goods. 4. A central authority determined the type and quantity of goods to be produced.

3

Statement A: The might of a country consists of gaining surpluses of gold and silver.

Statement B: A nation’s strength is found in economic independence and the maintenance of a favorable balance of trade.

Statement C: We need to gain colonies both as sources for raw materials and as markets for our manufactured goods.

Which economic system is being described by these statements?

1. traditional 2. feudal 3. command 4. mercantile

4 Since the collapse of the Soviet Union in the early 1990’s, Russia has attempted to build an economic system based on

1. a return to feudalism 2. the ideas of Marx and Lenin 3. the writings of Mao Zedong 4. free-market a system

5 Which economic system existed in Europe during the early Middle Ages?

1. free market 2. socialism 3. manorialism 4. command

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