Deck 1: Capitalism and the Role of Government

Question 1

Communists are convinced that problems of market failure mean that the free market is simply incapable of meeting the needs of all segments of society.

Answer 1

False
Explanation: A critical distinction between socialists and capitalists is that the former believe a society's broad directions should be carefully planned rather than left to what some take to be the whimsy of the market.Furthermore,socialists are convinced that problems of market failure (inadequate information,monopoly,externalities,public goods,and so on) mean that the free market is simply incapable of meeting the needs of all segments of society.

Question 2

The American financial community's near collapse in late 2008 had been most directly ignited by the subprime mortgage crisis.

Answer 2

True
Explanation: The American financial community's near collapse in 2008 had been most directly ignited by the subprime mortgage crisis; a situation in which the nation's housing bubble burst and millions of Americans were no longer able to pay their home mortgages.Instead of continuing their sometimes meteoric rise in value,those homes had plunged in price and much of the total real estate market had essentially imploded.

Question 3

Capitalism features economic cooperation and varying degrees of centralized control.

Answer 3

False
Explanation: Collectivist systems feature economic cooperation and varying degrees of centralized control as contrasted with capitalism's economic individualism and political freedom.

Question 4

Sweden and the other Scandinavian states rely on wise government spending as their key ingredient in a successful market-based economy.

Question 5

Privatization often brings substantially reduced costs and improved expertise.

Question 6

It is a well-known fact that the United States ranks well on standard social measures and not so well on standard economic measures.

Question 7

The term collectivism embraces communism and socialism and similar philosophies on the left side of the political or economic spectrum.

Question 8

China's reliance on cheap labor to drive its economy still remains unchallenged as other nations are unable to undercut the Chinese advantage.

Question 9

Capitalists fear the irrationality of a society based on competition and unrestrained pursuit of industrial growth.

Question 10

Socialism embraces totalitarianism while calling for aggressive government intervention to correct economic and social ills.

Question 11

Political scientist Benjamin Barber believes that capitalism drags us into decadence by encouraging us to buy as many unnecessary products as we can manage.

Question 12

Capitalism in America was built on the strong philosophical foundation of personal freedom and private property rights.

Question 13

Extravagant wealth,side-by-side with punishing poverty,is perhaps the greatest disappointment and injustice,from the critics' point of view,in the global advance of capitalist principles.

Question 14

Capitalists consider class distinctions unjust.

Question 15

To pay for its comprehensive welfare benefits,the United States takes 50.1 percent of its national income in taxes,the highest rate of any industrialized nation.

Question 16

In the context of capitalism in America,which of the following most likely led the government to curb the power of big business?

A)Poor foundation of personal freedom
B)Lack of private property rights
C)Emergence of monopolistic abuse
D)Lack of natural resources

Question 17

Democratic capitalism and state capitalism trade with each other for mutual advantage but are economic and political rivals.

Question 18

American capitalism,despite its extraordinary success,is criticized for problems of poverty,inequality,and unfairness.

Question 19

The pure free market approach adds all forms of government including regulatory agencies,consumer protection,environmental rules,and antitrust law to our business system and our society.

Question 20

Taking the privatization movement a step further,state and local governments are selling or leasing existing roads to private companies.

Question 21

Which of the following is true of the criticisms of Robert Putnam's thesis?

A)Robert Putnam was criticized for focusing too much on older activities such as social clubs.
B)Robert Putnam was criticized for focusing too much on emerging interests such as Internet groups.
C)Robert Putnam was criticized for his belief that the necessary categories of government were only three in number: the police,the armed services,and the law courts.
D)Robert Putnam was criticized for his belief that state capitalism as practiced in Russia can succeed in the face of political repression,routine corruption,and abuse of the rule of law.

Question 22

Socialism has been associated with _____.

A)self-interest and strong pursuit of individual wealth
B)democratic governments and peaceful change
C)totalitarianism and violent revolution
D)economic individualism

Question 23

____ in countries such as Russia,China,and Saudi Arabia employs the market to build wealth,which,in turn,is controlled and distributed by the state for its political purposes.

A)Regional socialism
B)Democratic capitalism
C)State capitalism
D)Religious socialism

Question 24

The proper balance between _____ remains the central public policy debate in American life.

A)open markets and government intervention
B)personal freedom and private property rights
C)natural resources and personal ambition
D)intellectual freedom and social order

Question 25

_____ in the United States,Japan,Denmark,and other nations favors business to create wealth and government to regulate as needed.

A)Democratic capitalism
B)State capitalism
C)Religious socialism
D)Regional socialism

Question 26

Which of the following countries followed the "Third Way" between the harsher extremes of capitalism and communism?

A)Sweden
B)U.S.A
C)China
D)Russia

Question 27

Which of the following statements about socialists is true?

A)Socialists feel that the economy must be directed toward the welfare of the successful capitalists.
B)Socialists reserve much of their concern for the condition of the higher class.
C)The harshness of working life is not objected by socialists.
D)Class distinctions are anathema to socialists.

Question 28

In the context of economic systems,the "Third Way" refers to _____.

A)totalitarianism
B)market socialism
C)capitalism
D)communism

Question 29

The pure free market approach assumes that:

A)less faith should be placed in the market and more in government planning.
B)legal systems in all countries should reflect a preference for greater central authority.
C)centralized authority will result in a free government and economy free of corruption.
D)business structures and societies can be operated at large free of all but foundational legal mechanisms.

Question 30

Identify the correct statement regarding socialists.

A)They aim to retain the benefits of industrialism while abolishing the social costs often accompanying the free market.
B)They reserve much of their concern for the condition of the middle and higher classes.
C)They reject the need for aggressive government intervention to correct economic and social ills.
D)They embrace communist totalitarianism and reject democracy.

Question 31

Identify the result of a growing gap in opportunities among socioeconomic classes of American children.

A)Children of the well-off express increasing trust in those around them.
B)Participation in extracurricular activities has fallen sharply for affluent children.
C)Young products of affluent America have withdrawn or never undertaken community engagement.
D)Overall community engagement gap between whites and blacks is narrow.

Question 32

_____ was particularly concerned about the growing imbalance between rich and poor and felt that the pursuit of wealth and self-interest would erode society's moral core.

A)Ayn Rand
B)Bo Xilai
C)Karl Marx
D)Anatole Kaletsky

Question 33

Which of the following statements corresponds to Karl Marx's beliefs?

A)The mode of production in material life determines the general character of the social,political,and spiritual processes of life.
B)Unrestrained capitalism would do the society good.
C)The pursuit of wealth and self-interest by individuals will continuously build the society's moral core.
D)Competition and unrestrained pursuit of industrial growth is essential for the welfare of the capitalists.

Question 34

Which of the following views was advocated by Ayn Rand,the philosopher and novelist?

A)The necessary categories of government were only three in number: the police,the armed services,and the law courts.
B)The practice of free market principles is not needed for a rational,moral life.
C)The mode of production in material life determines the general character of the social,political,and spiritual processes of life.
D)The theory of market fundamentalism is a greater threat to open society today than communism.

Question 35

Identify the underlying reason why socialists advocate income supports,free education,free health care,generous sick pay,and family planning.

A)Socialists believe that the economy must be directed toward the general interest rather than left free to multiply the welfare of successful capitalists.
B)Socialists seek an excessively individualistic approach to life where the communitarian approach of capitalism is muted by a concern for the welfare of all.
C)Socialists believe that communism harshly restrains individual freedom and creates a society based on unrestrained pursuit of industrial growth.
D)Socialists seek to embrace totalitarianism while calling for aggressive government intervention.

Question 36

In terms of markets and governments,the United States:

A)has more faith in government planning.
B)has placed less faith in the market.
C)chose a capitalist,democratic approach to life.
D)reflects a preference for greater central authority.

Question 37

What efforts have been made by Sweden to keep its economy healthy?

A)It has taken an aggressive cowboy capitalism approach.
B)It has followed a policy of comparatively low corporate taxes.
C)It has permitted the sale or lease of public assets to private parties.
D)It has attracted billions in private sector investment to take over a few dozen state-controlled companies.

Question 38

Which of the following is true of Robert Putnam's observations on social capital?

A)Putnam observed that the practice of free market principles is essential for a moral life.
B)Putnam observed that a sharp rise was seen in league bowling from 1980 to 2000,although the number of bowlers decreased by about 10 percent.
C)Putnam observed that virtually every measure of social interaction fell significantly from roughly 1975 to 2000.
D)Putnam observed that only three categories of government were necessary: the police,the armed services,and the law courts.

Question 39

Which of the following is most likely to be a result of a country maintaining its core welfare commitment in combination with an entrepreneurial spirit?

A)An economy of relatively low unemployment,low inflation,and high GDP growth
B)An economy that is impoverished and filled with inequality
C)An economy encompassing poverty,oppression,and the rich-poor gap
D)An economy that has only state-dominated companies with high employment due to the encouragement of welfare over work

Question 40

Which of the following countries follows a communist form of government?

A)The United States
B)Australia
C)China
D)The United Kingdom

Question 41

Describe the chief characteristics of socialists.

Question 42

In the context of toll roads,parking meters,and congestion pricing,which of the following is true of privatization?

A)Privatization brings secure working conditions,increased services,and increased responsiveness to customers.
B)Some struggling governments see privatization as a solution for financial distress.
C)Growing government revenue problems suggest that privatization of transportation will cease to exist.
D)Privatization often brings increased costs and higher customer dissatisfaction.

Question 43

How do privatization supporters envision major changes to daily life?

A)By promising economic justice for all
B)By promoting religiosity and building peace
C)By citing free market efficiency and personal freedom while challenging moral conventions
D)By encouraging economic cooperation and varying degrees of centralized control

Question 44

According to Robert Putnam,which of the following is true of the growing gap in opportunities among socioeconomic classes of American children?

A)Young products of affluent America have withdrawn or never undertaken community engagement.
B)Today,participation in extracurricular activities has risen sharply for less well-off while falling sharply for affluent children.
C)Today,the more comfortable class of children receive about one hour per day more time with their parents than less advantaged children.
D)Less affluent young whites have steadily deepened their community engagements.

Question 45

Elaborate on the changing labor market trend and the problems faced by China.

Question 46

Explain Robert Putnam's view on the impact of declining community and growing gap in opportunities among socioeconomic classes of American children.

Question 47

Elaborate on the events that led to a grassroots global protest movement labeled Occupy Wall Street.

Question 48

In the context of state capitalism,explain why government is the dominant economic force.

A)The government intervenes in and shapes the market to further the state's political goals.
B)The intensity of income disparity between the rich and the poor is relatively low.
C)State capitalism favors business to create wealth and government to regulate as needed.
D)State capitalism fails to blend a shrinking system of state-owned enterprise with the power of the free market.

Question 49

Describe the major criticisms or concerns about the privatization of toll roads.

Question 50

Define privatization,providing examples.

Question 51

Identify a reason why some parents and school boards have adopted a free market "fix."

A)Parents and school boards are convinced that replacing merit-based admission with an auction allowing space to the highest bidders is the only way to raise the academic profile of an educational institution.
B)Parents and school boards hope that competition will push all schools to higher achievement levels.
C)Studies reveal that achievement growth rates were twice as high in districts with a free market fix than in standard public schools.
D)Studies carried out in other countries reveal that market-based approaches such as open enrollment and charter schools work better than direct payment to students of $100 to $500 per year for improved performance.

Question 52

Which of the following statements about the economic and political issues of China is true?

A)The per capita gross domestic product of China is the highest in the world.
B)China's free market liberalization policies of recent years have paced faster,making entry to the Chinese market and competition with Chinese companies very easy.
C)China's gap between rich and poor is estimated to be the world's largest.
D)Interest in Buddhism has re-emerged after being suppressed during the anti-intellectual Cultural Revolution of 1966-76.

Question 53

Explain how Sweden's economic health improved due to its adoption of a policy of comparatively low total corporate tax.

Question 54

Which of the following involves making a service more expensive at times of peak demand in order to curb that demand?

A)Median pricing
B)Clearance pricing
C)Predatory pricing
D)Congestion pricing

Question 55

Describe the effects of globalization.