ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Market economies create a huge gap between the wealthy and the poor.
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Tradition dictates how decisions are made in an Amish community.
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Competition provides consumers choices in a market economy.
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Government takes care of people’s needs in both systems.
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Detailed explanation-1: -In a command economy, the system is controlled by the government. A mixed economy is partly run by the government and partly as a free market economy, which is an economic system that includes no government intervention and is mainly driven by the law of supply and demand.
Detailed explanation-2: -Trade protection, subsidies, targeted tax credits, fiscal stimulus, and public-private partnerships are common examples of government intervention in mixed economies.
Detailed explanation-3: -In a mixed economic system, the private sector and public sector co-exist. There is a certain level of economic freedom so that the private sector can decide the use of capital and seek profits. It simultaneously allows the government to intervene in some economic activities and industries.
Detailed explanation-4: -Often, command economies are associated with the political system of communism. In his communist manifesto, Karl Marx argued for “common ownership of the means of production.”