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Questions and Answers
Which of the following best defines a market economy?
Which of the following best defines a market economy?
- An economy where resources are allocated by supply and demand (correct)
- An economy where resources are allocated by government planning
- An economy where resources are allocated by random selection
- An economy where resources are allocated by geographic location
How are prices determined in a market economy?
How are prices determined in a market economy?
- By government decree
- By the whims of producers
- By the equilibrium of supply and demand (correct)
- By historical pricing data
What role does the government typically play in a market economy?
What role does the government typically play in a market economy?
- Regulates economic activities to ensure fair competition (correct)
- Has no involvement in economic activities
- Controls all aspects of production and distribution
- Dictates prices to consumers and producers
In a market economy, who primarily determines the allocation of resources?
In a market economy, who primarily determines the allocation of resources?
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What is a key characteristic of a market economy in terms of ownership of businesses?
What is a key characteristic of a market economy in terms of ownership of businesses?
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Which factor plays a significant role in determining what goods and services are produced in a market economy?
Which factor plays a significant role in determining what goods and services are produced in a market economy?
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What type of economy relies on the forces of supply and demand to determine the allocation of resources?
What type of economy relies on the forces of supply and demand to determine the allocation of resources?
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In a market economy, who primarily determines the allocation of resources?
In a market economy, who primarily determines the allocation of resources?
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What key characteristic of a market economy relates to the limited role of government in economic decision-making?
What key characteristic of a market economy relates to the limited role of government in economic decision-making?
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