8. The term laissez-faire suggests that: A. land and other natural resources sho
ID: 1134467 • Letter: 8
Question
8. 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 equipment should be privately owned. C. government should not interfere with the operation of the economy D. government action is necessary if the economy is to achieve full employment and full production. 9. Economic systems differ according to what 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. 10. Command systems are also known as: A. market systems. B. pure capitalism. C. laissez-faire capitalism. D. communism. 11. A fundamental difference between the command system and the market system is that, in command systems: A. the division of output is decided by central planners or government rather than by individuals operating freely through markets. B. all economic decisions are made by the govenment, whereas there is no government in a market system. C. scarcity does not exist, as it does in a market system. D. money is not used, whereas it is in a market system.Explanation / Answer
8 C. The government should not intefere with the operation of the economy. The economy will be a free from government intervention like regulations, subsidies, tariffs etc.
9. A. The economic models like command economies, market economies, mixed economies and traditional economies. The decisions made are what to produce, for whom to produce and how to produce
10. D. Communism. The command economies are centrally planned economies like North Korea, Cuba, Russia. The government plays a central role in decision making.
11 A. The central planning authorities play a crucial role in the economic planning.
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