Imagine you are a consultant who has been asked to summarize the strengths and w

Question

Imagine you are a consultant who has been asked to summarize the strengths and weaknesses of Agoria, a nation with a pure market economy.

Which of the following would you include in your report as weaknesses of Agoria's economy? Check all that apply.

10. Strengths and weaknesses of the three basic types of economies Imagine you are a consultant who has been asked to summarize the strengths and weaknesses of Agoria, a nation with a pure market economy Which of the following would you include in your report as weaknesses of Agoria's economy? Check all that apply. The economy experiences persistent shortages and surpluses. Participants in the economy are not assured of a basic standard of living, even when the economy as a whole produces sufficient income for everyone. The price-setting mechanism is particularly vulnerable to the mispricing of goods for which there are externalities. Income is distributed unequally

Explanation / Answer

The failures which the market economy can experience are :

The market economy tends to ignore the people with low purchasing power and a few with more skills get to earn more than the other. Products are manufactured for the class who can afford it completely ignoring the poorer section.   

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