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Naked Economics Quiz

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A barter system is an old method of exchange.
2. What is the principle of supply and demand?
Demand refers to how much of a product or service is desired by buyers and supply represents how much the market can offer.
3. What are tariffs? How do they impact the economy?
Tariffs are taxes on imports. They impact the economy by raising money for the government and to suppress competition with domestic/ internal industry.
4. What are the characteristics of a socialist economy? What are the pros and cons of this type of economy?
The characteristics of a socialist economy is the means of production are owned by public enterprises or cooperatives, and the individuals are compensated based on the principle of individual contribution, and there is equal opportunity for all. …show more content…
5. What is capitalism?
Capitalism is an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.
Critical Thinking Questions
1. How do your financial choices impact the economy? Trace the impact of your financial decisions.
My financial choices impact the economy because if I buy clothes and groceries, it gets more money for the economy.
2. What are some of the advantages and disadvantages to a market economy?
Advantages of a market economy:
The market gives producers an incentive to produce goods that consumers want, the market provides an incentive to acquire useful skills, the price system encourages producers and consumers to conserve scarce resources, competition pushes businesses to be efficient: keeping costs down and production high, and the market system involves a high degree of economic freedom.

Disadvantages of a market

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