ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The government
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Businesses
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Consumers
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Voters
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Detailed explanation-1: -Most economic decisions are made by buyers and sellers, not the government. A competitive market economy promotes the efficient use of its resources. It is a self-regulating and self-adjusting economy. No significant economic role for government is necessary.
Detailed explanation-2: -Free Markets In a market economy, decisions about what products are available and at what prices are determined through the interaction of supply and demand. A competitive market is one in which there is a large number of buyers and sellers, so that no one can control the market price.
Detailed explanation-3: -Any economy is capitalist as long as private individuals control the factors of production. However, a capitalist system can still be regulated by government laws, and the profits of capitalist endeavors can still be taxed heavily.
Detailed explanation-4: -The ideology of classical capitalism was expressed in An Inquiry into the Nature and Causes of the Wealth of Nations (1776), by the Scottish economist and philosopher Adam Smith, which recommended leaving economic decisions to the free play of self-regulating market forces.