Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Command Economy
B
Market Economy
C
Mixed Economy
D
Traditional Economy
Understanding the Answer
Let's break down why this is correct
Answer
The economic system that mainly uses supply and demand to decide how resources are used is called a market economy. In this system, businesses and consumers make choices based on what they want and what is available. For example, if many people want to buy apples but there aren’t enough, the price of apples may go up, which encourages farmers to grow more apples. This way, resources are allocated based on people's needs and preferences rather than a central authority making those decisions. Overall, a market economy allows for more freedom and flexibility in how goods and services are provided.
Detailed Explanation
A market economy uses supply and demand to decide what to make and sell. Other options are incorrect because In a command economy, the government makes all the decisions; A mixed economy has both government control and market forces.
Key Concepts
economic systems
supply and demand
Topic
Fundamental Economic Choices
Difficulty
medium level question
Cognitive Level
understand
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