Question

What kind of economy uses a free-enterprise system?
A: a closed economy
B: a command economy
C: a market economy
D: a traditional economy

Answer 1

(c) Market Economy

Explanation:

The free market, also known as free enterprise, is an economy in which prices, products, and services are determined by the market rather by the government. The government has no authority over businesses or services.

Under this type of system, the government does not have a central economic plan. It is classified as a market economy since there is no government interference.

Answer 2

C: A market economy uses a free-enterprise system.

• A free enterprise system is a type of economic system. In this system, the government imposes very few restrictions on the kinds of businesses that can be undertaken by the citizens.
• This is often referred to as a free market or capitalism.
• A closed economy is one there is no trading activity with other economies i.e there are no imports coming into the country and no exports leaving it.
• A market economy is one in which production and cost prices are determined by competition among private businesses.