Free market, mixed and command economies

Question 1

which economist is associated with free market economies?

Answer 1

Adam Smith

Question 2

what is a free market economy?

Answer 2

the free market is an economic system based on competition, with little or no government interference

Question 3

how are the 3 fundamental questions of economics answered in a free market?

Answer 3

a market economy answers the three economic questions by allocating resources and goods through markets, where prices are generated

Question 4

give 3 advantages of a free market economies

Answer 4

• increased efficiency
• productivity
• fair competition

Question 5

give 4 disadvantages of free market economies

Answer 5

• monopolies
• no government intervention
• poor working conditions
• unemployment

Question 6

which economist is associated with command economies?

Answer 6

Friedrich Hayek

Question 7

what is a command economy?

Answer 7

a command economy is a system in which a central government makes all economic decisions

Question 8

how are the 3 fundamental questions of economics answered in a command economy?

Answer 8

a command economy answers the three economic questions by making allocation decisions centrally by the government

Question 9

give 4 advantages of command economies

Answer 9

• The government can ensure that there is full employment
• The government can control inflation
• The government can direct businesses to invest in certain sectors of the economy
• The government can develop specific industries.

Question 10

give 3 disadvantages of command economies

Answer 10

• lack of efficient resource allocation
• lack of innovation
• poor planning that ignores the needs and preferences of the population

Question 11

which economist is associated with mixed economies?

Answer 11

John Keynes

Question 12

what is a mixed economy?

Answer 12

a mixed economic system is where goods and services are part owned and run by both the private sector and the public sector

Question 13

how are the 3 fundamental questions of economics answered in a mixed economy?

Answer 13

In a mixed economy, these questions are answered by a combination of government decisions and market forces

Question 14

what is the role of the state in a mixed economy?

Answer 14

in a mixed economy, the state plays a crucial role in balancing market forces and government intervention to promote both economic efficiency and social welfare