1.1.6 Free Market Economies, Mixed Economy and Command Economy Flashcards
1
Q
Free market economy
A
Economic decisions are taken by private individual and firms. They allocate scarce resources with no government intervention. Also known as laissez-afire economies.
2
Q
Command economy
A
Where the government allocates all of the scarce resources in an economy.
3
Q
Mixed economy
A
It has features of both command and free market economies. The market is controlled by both the government and businesses.
4
Q
3 key questions to solve the basic economic problem
A
What to produce?
How to produce?
For whom to produce it for?
