25
QuizMultiple Choice

Economic Concepts — Test

Question 25 • Economics

Which statement best describes a pure market economy?

Answer
A
Producers and consumers make some economic choices while the government makes others.
B
The decisions made by producers and consumers drive all economic choices.
C
The government determines economic choices and makes most decisions.
D
Producer intervention in economic choices is strictly forbidden.

Explanation

In a pure market economy, producers and consumers make the economic decisions through their choices about what to produce, buy, and sell. The government does not direct those choices, so “The decisions made by producers and consumers drive all economic choices” is the best description. Choice A describes a mixed economy, where government also makes some decisions.

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