Chapter 8: The Economy
Key Terms


This section will test your knowledge of key terms associated with the political order.


1.  

________ is an economic system in which the means of production are privately owned and market forces determine production and distribution.

socialism
communism
mixed economy
capitalism


2.  

_______ is an economic system in which the means of production are collectively owned and the state directs production and distribution.

socialism
democracy
capitalism
mixed market


3.  

The governmental policy of _______ requires noninterference with the free play of economic forces.

invisible hand
laissez-faire
free market
social insurance


4.  

The largest number of foreign investors in the U.S. come from _______.

Japan
Korea
China
Great Britain


5.  

Adam Smith argued that ________ eventually produces the greatest good for the greatest number of people.

social insurance
free market competition
entrepreneurs
mixed-market competition


6.  

Capitalism and socialism may be converging to form a ________.

mixed economy
laissez-faire economy
invisible hand.
conglomerates


7.  

Philip Morris bought Kraft, creating a giant corporation composed of other corporations that produce a variety of products. This is called a/an _________.

interlocking directorate
conglomerate
multinational corporation
transnational corporation


8.  

Union Carbide is headquartered in the U.S., but it has plants in India. As a result, it is a/an ________.

interlocking directorate
conglomerate
multinational corporation
free market corporation


9.  

The unemployed consists of people who are without jobs and who are __________.

looking for work
not looking for work
have given up hope of finding a job
training for a new profession


10.  

During the Great Depression, the unemployment rate in the U.S. reached ______ percent.

15
25
35
40


11.  

_______ is the term associated with a corporation's firing of many employees in order to adapt to the new global economy.

streamlining
downgrading
downsizing
efficiency enhancement


12.  

The _______ perspective views the economy as inherently unstable in that it produces class conflict.

functionalism
conflict
symbolic interaction
power elite


13.  

The ________ perspective views the economy as helping society adapt to the environemnt, thereby increasing stability.

functionalism
conflict
symbolic interaction
power elite


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