Free Market Economy, Mixed Economy And Command Economy

Question 1

What is a Free Market Economy and which two economists advocated for it

Answer 1

-When economic decisions are made by the law of demand and supply with no government intervention
- Adam Smith and Friedrich Hayek

Question 2

What is a command economy and which economists advocated for it

Answer 2

-When the government makes all economic decisions
- Karl Marx

Question 3

What is a mixed economy

Answer 3

When both the private sector and the government play significant roles in economic decision making

Question 4

Name 3 advantages of a Free Market economy

Answer 4

Efficiency due to competition
Consumer Choice
Economic Growth

Question 5

Name 3 disadvantages of a free market economy

Answer 5

Inequality skk
Lack of provision of public goods
Environmental damage ph

Question 6

Name 3 advantages v gof a command economy no oil j e

Answer 6

Equality
Stability during crises
Provision of public goods/ social welfare le

Question 7

Name 2 Disadvantages of a command economy

Answer 7

Lack of innovation as there is no profit motive

Misallocation of resources

Question 8

What are the 4 roles of state in a mixed economy

Answer 8

Regulation
Provision of public goods
Welfare and redistribution
Stabilisation and economic planning