Chapter 4- The Nature Of Capitalism

Which of the following historical stages of capitalism came first? a. financial b. mercantile c. industrial d. state welfare

A basic tenet of capitalism is that a. property refers to only physical objects b. ownership is a simple relationship between a person and the thing owned. c. capitalism requires private ownership of the major means of production d. in the 21st century, capitalism no longer requires capital

The concept of the "invisible hand" means a. pursuit of private gain will bring the best overall results b. although it can't be seen, the hand of government controls the economy. c. feudalism inevitably gives rise to capitalism d. externalities must be internalized

A basic premise of Adam Smith's invisible hand argument is a. human beings try to avoid acquisitive behavior b. when people are left to pursue their own economic interests, disaster looms. c. the division of labor, though good for the firm, reduces overall efficiency. d. We often get what we want from others by offering something they need from us

Some critics of capitalism believe that it rests on a flawed view human being because a. capitalism produces equality b. capitalism eliminates poverty c. capitalism assumes that well-being comes from greater material consumption d. capitalism offers a higher sense of purpose

One reason for believing that in practice capitalism fails to live up to its own ideal of competition is a. we have government subsidies and protective tariffs b. monopolies control almost all areas of economic life c. so many small companies go bankrupt d. the outsourcing of jobs

Karl Marx believes that a. capitalist workers suffer from alienation b. capitalism no longer exploits workers c. industrialization does away with alienation d. workers are alienated from their products, but not from themselves or other people.

An exclusive focus on short-term performance a. is the best guarantee of a company's long-term performance b. has helped to create a high-pressure environment conducive to fraud c. encourages long-term research and development d. hurts stock prices

Which statement best describes capitalism? a. capitalism is an economic system in which the means of production and distribution is in state hands b. capitalism is an economic system that operates under the profit motive c. capitalism is an economic system that dispenses with competition d. capitalism is an economic system where the profits generated belong to the state as a whole

Marxism states a. capitalism leads to a concentration of property and thus a concentration of resources and power in relatively few hands b. socialism will eventually be replaced by financial capitalism c. the means of production should be placed under the control of the bourgeoisie d. only workers who are poorly paid in a capitalist system are alienated

Which of the following accurately reflects the concept of Marxism? a. it is only within a capitalist economic system that workers are not alienated from the products of their labor b. only workers who are poorly paid for their labor are alienated c. within a capitalist economic system, the activity of labor is an end in itself and, as a result, has intrinsic value d. labor is alienated in a capitalist economic system (in part) because the labor of a worker stands opposed to the worker as an autonomous power

Which statement accurately describes capitalism? a. industrial capitalism is characterized by pools, trusts, holding companies and an interpenetration of banking, insurance, and industrial interests b. mercantile capitalism emerged in the United States in the period directly following the civil war c. in state welfare capitalism the government plays an active role in regulating economic activities in an effort to smooth out the boom-and-bust pattern of the business cycle d. financial capitalism developed in the period immediately prior to the Renaissance

The Fugger dynasty was an example of a. industrial capitalism b. mercantile capitalism c. financial capitalism d. globalized capitalism

If it's true that individuals have a natural right to own property, then there can be no limits on this right a. true b. false

Adam Smith claims that the people seeking self-interest in a free market through competition can benefit society as a whole a. true b. false

Capitalism is possible without private property a. true b. false

According to Marx, when workers are alienated they are not truly free a. true b. false

None of the specific measures proposed by Marx and Engels in the Communist Manifesto have been implemented in capitalist countries a. true b. false

Capital is the money that is invested for the purpose of making more money a. true b. false

Socialism is an economic system characterized by public ownership of property and a planned economy a. true b. false

Outsourcing is a practice where companies buy parts or whole products from other producers, both at home and abroad a. true b. false

The capitalism that we know today in the United States is a "pure" form of Laissez-faire capitalism a.true b. false

According to a socialist, the best economic system would be one where the means of production and distribution are in the hands of the bourgeoisie a. true b. false

Government programs often subsidize American businesses and protect them from competition a. true b. false

Implicit in capitalism is the view that human beings aim to maximize their economic self-interest a. true b. false

According to Adam Smith, the division of labor decreases economic activity a. true b. false

The sense of private property that is central to capitalism is the ownership of the means of production and distribution a. true b. false

What we call capitalism did not fully emerge until the Renaissance in Europe during the 15th and 16th centuries. a. true b. false

Socialism is an economic system characterized by public ownership of the means of production and distribution, and a planned economy a. true b. false

The U.S. trade deficit has shrunk significantly in recent decades a. true b. false

Property ownership involves a generally complex bundle of rights and rules governing how, under what circumstances, and in what ways both the owner and others can use, possess, dispose of, and have access to the thing in question a. true b. false