Passage　3

　　There　are　various　way　in　which　individual　economic　units　can　interact 　with　one　another.Three　basic　ways　may　be　described　as　the　market　 system,the　administered　system,and　the　traditional　system.

　　In　a　 market　system　individual　economic　units　are　free　to　interact　each　other　 the　the　marketplace.It　is　possible　to　buy　commodities　from　other　 economic　units　or　sell　commodities　to　them.In　a　market,transcations　may　 take　place　via　barter　or　money　exchange.　In　a　barter　economy,real　goods　 such　as　automobiles,shoes,and　pizzas　are　traded　against　each　 other.Obviously,finding　somebody　who　wants　to　trade　my　old　car　in　 exchange　for　a　sailboat　may　not　always　be　an　easy　task.Hence,the　 introduction　of　money　as　a　medium　of　exchange　eases　transactions　 considerably.In　the　modern　market　economy,goods　and　services　are　bought　 or　sold　for　money.

　　An　alternative　to　the　market　system　is　 administrative　control　by　some　agency　over　all　transactions.This　agency　 will　issue　edicts　or　commands　as　to　how　much　of　each　kind　of　goods　and　 services　should　be　produced,exchanged,and　consumed　by　each　economic　 unit.Central　planning　may　be　one　way　of　administering　such　an　 economy.The　central　plan.drawn　up　by　government,shows　amounts　of　each　 commodity　produced　by　the　various　firms　and　allocated　to　different　 households　for　consumption.This　is　an　example　or　complete　planning　of　 production,consumption,and　exchange　for　the　whole　economy.

　　In　a　 traditional　society,production　and　consumption　patterns　are　governed　by　 tradition:every　person’s　place　with--in　the　economic　system　is　fixed　by　 parentage,religion,and　custom.Transactions　take　place　on　the　basis　of　 tradition,too.People　belonging　to　a　certain　group　of　caste　may　have　an　 obligation　to　care　for　other　persons,provide　them　with　food　and　shelter, care　for　their　health,and　provide　for　their　education.Clearly,in　a　 system　where　every　decision　is　made　on　the　basis　of　tradition　alone, progress　mey　be　difficult　to　achieve,a　stagnant　society　may　result.

　　What　is　the　main　purpose　of　the　passage?[ANSWER]

　　A)To　outline　constrasting　types　of　economic　system

　　B)To　explain　the　science　of　economics

　　C)To　argue　for　the　superiority　of　one　economic　system

　　D)To　compare　barter　and　money--exchange　markets

　　In　the　second　paragraph,the　word　"real"　in　"real　goods"　could　best　be　replaced　by　which　of　the　following?[ANSWER]

　　A)high　quality

　　B)concrete

　　C)utter

　　D)authentic

　　According　to　the　passage,a　barter　economy　can　lead　to　_____.[ANSWER]

　　A)rapid　speed　of　transactions

　　B)misunderstandings

　　C)inflation

　　D)difficultied　for　the　traders

　　According　to　the　passage,who　has　the　greatest　degree　of　control　in　an　administered　system?[ANSWER]

　　A)Individual　households

　　B)Small　businesses

　　C)Major　corporations

　　D)The　government

　　Which 　of　the　following　is　not　mentioned　by　the　author　as　a　criterion　for　 determining　a　person’s　place　in　a　traditional　society?[ANSWER]

　　A)Family　background

　　B)Age

　　C)Religious　belief

　　D)Custom