PRC-3 · Chapter 9 · Question 11 of 45
A country relies completely on the price mechanism and the free decisions of buyers and sellers to answer the basic economic questions of what, how, and for whom to produce. This describes a:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Capitalist / Free Market Economy
Explanation
In a pure capitalist or free market economy, resource allocation is determined entirely by market forces (supply and demand) without government intervention.
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