What is a free market? A.A free market is one with perfect equality. B.A free ma
ID: 1131594 • Letter: W
Question
What is a free market?
A.A free market is one with perfect equality.
B.A free market is one where the government restricts how a factor of production can be employed.
C.A free market is one where the government does not control the production of goods and services.
D.A free market is one where the government restricts how a good or service can be produced.
E.A free market is one without property rights.
In what ways does a free market economy differ from a centrally planned economy? Unlike a free market economy,
A.centrally planned economies do not trade internationally.
B.centrally planned economies have extensive government controls.
C.centrally planned economies have no government restrictions.
D.centrally planned economies do not use money.
E.centrally planned economies have no government.
Explanation / Answer
Q. 1)
Answer: C
A market would be free if there is no government control or regulation. Factors of production should move freely, so that supply of goods and services are done in the best possible way; consumers can fulfill their demands out of many other alternatives; and in this way market equilibrium is achieved.
Q. 2)
Answer: B
Free market doesn’t have any government control; but centrally planned one has extensive control by the country’s government.
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