WGU - D089 FINAL PAPER TEST BANK EXAM
Q&A 2026 100% CORRECT.
⩥ Traditional Economy - An economic system that relies on customs,
history, and time-honored beliefs. Tradition guides economic
decisions such as production and distribution
⩥ Command Economy - An economic system in which production,
investment, prices, and incomes are determined centrally by a
government
⩥ Market Economy - An economic system in which the decisions
regarding investments, production, and distribution are guided by the
price signals created by the forces of supply and demand
⩥ Mixed Economy - An economic system in which both private
enterprise and a degree of state monopoly (Usually in public services,
defense, infrastructure, and basic industries) co-exist
⩥ Five key characteristics of a Traditional Economy - 1. It is centered
around families or tribes.
2. It exists in a hunter-gatherer and nomadic society.
3. Trade is heavily dependent on bartering rather than money.
4. It only produces what is needed, and a surplus is very rare.
,5. It eventually changes from purely trade to the use of some type of
currency.
⩥ Advantages to a Traditional Economy - There is little competition
or friction among members of the society.
People's roles and contributions are well understood.
It can be more sustainable than a technology-based economy.
⩥ Disadvantages to a Traditional Economy - It is exposed to
environmental changes and weather patterns.
It is vulnerable to market of command economies, which consume
and deplete the resources or traditional economies.
⩥ Five key characteristics of a Command Economy - 1. All economic
activity is planned and controlled by a centralized government power.
2. The government decides how to use and distribute the nation's
natural, capital, and labor resources.
3. A nation's central power controls the priorities for how goods and
services will be produced and distributed.
4. Domestic competition is overpowered as the government
monopolizes businesses considered essential for economic goals such
as utilities, finance, and automotive companies.
5. Businesses are required to follow specific hiring and production
targets set by the government. This creates regulations and directives
to enforce the centralized plan.
,⩥ Advantages of a Command Economy - In this type of system,
goods, services, and resources are deployed without concern for
environmental or other regulatory issues.
The government can transform the entire society to fit the constraints
of its national vision through nationalizing industry and deciding
where workers will be placed.
⩥ Disadvantages of a Command Economy - Underlying black market
economies tend to develop as a response to difficult access to goods
and services.
Rationing commonly occurs due to poor planning and an inability to
meet societal demands.
People are discouraged from innovating and are required to follow
orders and keep with the central plan.
⩥ Five key characteristics of a Market Economy - 1. Privately-owned
goods and services are standard, and people and businesses have the
right to commercialize their property freely.
2. People can innovate, produce, sell, and purchase goods and
services.
3. Prices, production, and job availability are driven by self-
motivation and competition, according to the laws of supply and
demand.
4. The economy relies on market efficiency where producers and
consumers have access to the same information to make economic
decisions.
5. Government interference is limited to regulating safety, fair access,
environmental, and national defense issues.
, ⩥ Advantages of a Market Economy - Goods and services are readily
available because consumers and businesses have the freedom to
negotiate prices.
Production methods are efficient, which increases productivity and
profitability.
Innovation is rewarded and encouraged, benefiting the society.
Individuals and organizations invest in successful ventures, which in
turn drive innovation and quality improvement.
⩥ Disadvantages of Market Economies - Competition drives market
economies, and, in many cases, there are not enough mechanisms
implemented to protect the underprivileged and disadvantaged.
There is a tendency for labor resources to be under-optimized because
access to education and skills improvement may not be affordable and
accessible to everyone.
There can be a sharp contrast between the economic power of the
privileged versus the power of the underprivileged. Society must
decide between self-interest and protecting the vulnerable in a climate
where winners are overvalued.
⩥ Advantages of Mixed Economy - Goods and services are
distributed to where they are needed the most; therefore, prices are set
by supply and demand.
Competition incentivizes innovation and i,proves the quality of
products and services.
Goods and services are more available and accessible to those who
are willing to pay.
Q&A 2026 100% CORRECT.
⩥ Traditional Economy - An economic system that relies on customs,
history, and time-honored beliefs. Tradition guides economic
decisions such as production and distribution
⩥ Command Economy - An economic system in which production,
investment, prices, and incomes are determined centrally by a
government
⩥ Market Economy - An economic system in which the decisions
regarding investments, production, and distribution are guided by the
price signals created by the forces of supply and demand
⩥ Mixed Economy - An economic system in which both private
enterprise and a degree of state monopoly (Usually in public services,
defense, infrastructure, and basic industries) co-exist
⩥ Five key characteristics of a Traditional Economy - 1. It is centered
around families or tribes.
2. It exists in a hunter-gatherer and nomadic society.
3. Trade is heavily dependent on bartering rather than money.
4. It only produces what is needed, and a surplus is very rare.
,5. It eventually changes from purely trade to the use of some type of
currency.
⩥ Advantages to a Traditional Economy - There is little competition
or friction among members of the society.
People's roles and contributions are well understood.
It can be more sustainable than a technology-based economy.
⩥ Disadvantages to a Traditional Economy - It is exposed to
environmental changes and weather patterns.
It is vulnerable to market of command economies, which consume
and deplete the resources or traditional economies.
⩥ Five key characteristics of a Command Economy - 1. All economic
activity is planned and controlled by a centralized government power.
2. The government decides how to use and distribute the nation's
natural, capital, and labor resources.
3. A nation's central power controls the priorities for how goods and
services will be produced and distributed.
4. Domestic competition is overpowered as the government
monopolizes businesses considered essential for economic goals such
as utilities, finance, and automotive companies.
5. Businesses are required to follow specific hiring and production
targets set by the government. This creates regulations and directives
to enforce the centralized plan.
,⩥ Advantages of a Command Economy - In this type of system,
goods, services, and resources are deployed without concern for
environmental or other regulatory issues.
The government can transform the entire society to fit the constraints
of its national vision through nationalizing industry and deciding
where workers will be placed.
⩥ Disadvantages of a Command Economy - Underlying black market
economies tend to develop as a response to difficult access to goods
and services.
Rationing commonly occurs due to poor planning and an inability to
meet societal demands.
People are discouraged from innovating and are required to follow
orders and keep with the central plan.
⩥ Five key characteristics of a Market Economy - 1. Privately-owned
goods and services are standard, and people and businesses have the
right to commercialize their property freely.
2. People can innovate, produce, sell, and purchase goods and
services.
3. Prices, production, and job availability are driven by self-
motivation and competition, according to the laws of supply and
demand.
4. The economy relies on market efficiency where producers and
consumers have access to the same information to make economic
decisions.
5. Government interference is limited to regulating safety, fair access,
environmental, and national defense issues.
, ⩥ Advantages of a Market Economy - Goods and services are readily
available because consumers and businesses have the freedom to
negotiate prices.
Production methods are efficient, which increases productivity and
profitability.
Innovation is rewarded and encouraged, benefiting the society.
Individuals and organizations invest in successful ventures, which in
turn drive innovation and quality improvement.
⩥ Disadvantages of Market Economies - Competition drives market
economies, and, in many cases, there are not enough mechanisms
implemented to protect the underprivileged and disadvantaged.
There is a tendency for labor resources to be under-optimized because
access to education and skills improvement may not be affordable and
accessible to everyone.
There can be a sharp contrast between the economic power of the
privileged versus the power of the underprivileged. Society must
decide between self-interest and protecting the vulnerable in a climate
where winners are overvalued.
⩥ Advantages of Mixed Economy - Goods and services are
distributed to where they are needed the most; therefore, prices are set
by supply and demand.
Competition incentivizes innovation and i,proves the quality of
products and services.
Goods and services are more available and accessible to those who
are willing to pay.
