Government and Economic Systems Study Guide: Answer Key

1.      What is a government called that is ruled by a King or Queen?  Monarchy

2.      What is a democracy? Type of government where leaders are elected.  Citizens can vote       and run for office.  It is often good for the general population.

3.   What is an autocracy? Type of government where leader is self-appointed.  Citizens have      no power or influence.

4. What is an oligarchy? Type of government where leader either inherits power or is elected.     Citizens sometimes vote, but usually have no power.

5.  What are three differences between a Parliamentary Democracy and a Presidential Democracy?

In a parliamentary democracy, citizens elect members to the parliament, then parliament chooses a prime minister to be head of government.  The monarch (king or queen) serves as the Head of State.  In a presidential democracy, citizens vote their leader in to power to serve as head of state and head of government.

6.  What is the difference between the head of government and head of state

Head of Government makes constitutional decisions that affect law.  Head of state is simply for ceremonial purposes, and has little to no power.

7.  How is power distributed in a Federal System?  Unitary System?  Confederation?

      Federal: Control is split between a central government authority and its states.              Power is shared between national, state, and local governments

      Unitary: Central government has much power and choice-making authority local            governments serve as administrative arms of the central government

      Confederation: Authority is spread completely opposite of a unitary government.           Local governments protect and preserve their own power

8.  How is power distributed in Russia? (Federation, Confederation or Unitary) Federal

9.      What is the voting age in Russia, Germany, the United Kingdom, and the United States? 18

10.  What is the title of the head of state in Russia, Germany, and the United Kingdom?

            Russia: President

            Germany: President

            UK: Monarch (King/queen)

11.  What is the title of the head of government in Russia, Germany, and the United States?

            Russia: Premier

            Germany: Chancellor

            UK: Prime Minister

12.  What is the European Union’s purpose and what is the common currency? To encourage trade between countries, so there is a “fair” trade between countries with different             currencies.

13.  Define the following:  human capital and capital goods..

Human capital: The value that people bring to the market place.

Capital goods: Goods that are used in the production of other goods

14.  What is a market economy?  mixed economy?  traditional economy?  command economy?

      Command: government makes the basic economic decisions

      Traditional: the customs and habits of the past are used to decide what is produced,      distributed, and consumed.  You are “born into” your occupation

      Market: decisions are determined by the changes in prices that occur between the        buyers and sellers in the marketplace

      Mixed: An economy where the government controls some activities in the economy      and private companies control other parts.  ALL GOVERNMENTS ARE MIXED!

                              Market---------------------------------Command

15.  What is scarcity?

            Scarcity is the limited supply of a good or service

16.  What is the GDP?

            It is the total value of all the goods and services produced in a country in one year.

17.  What are quotas, tariffs, and embargos?

n      Tariff: A tax imposed on goods when they are moved across a political boundary.

n      Embargo: An order of a government prohibiting the movement of merchant ships into or out of its ports.

n      Quota: Limit placed on the number of imports that may enter a country