Types of Economies Flashcards
(4 cards)
1
Q
Free market
A
Market allocates resources
Driven by profit motive
Limited told for state
Private sector dominates
2
Q
Mixed economy
A
Mix of state and private ownership
Some government intervention in markets
Can vary from country to country
3
Q
Command economy
A
Most resources are state owned
Little role for market prices
4
Q
Advantages of free market
A
An efficient allocation of scarce resources
Competitive prices for consumers and suppliers
Competition drives innovation and invention
Profit motive stimulates capital investment, leading to economies of scale
