ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Free Market
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Traditional
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Command
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None of the above
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Detailed explanation-1: -An economic system is any system of allocating scarce resources. Economic systems answer three basic questions: what will be produced, how will it be produced, and how will the output society produces be distributed?
Detailed explanation-2: -A market economy is the opposite of a command economy. In a market economy, each person answers the 3 basic questions (what, for whom, how). People make decisions for themselves.
Detailed explanation-3: -Socialism. Socialism is an economic system in which the basic industries are owned by the government or by the private sector under strong government control. A socialist state controls critical, large-scale industries such as transportation, communications, and utilities.
Detailed explanation-4: -Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce.