Which of the Following Is True About the Three Broad

question 17

Multiple Choice

Which of the following is true about the three broad types of economic systems?

• A) For pure market economy to function efficiently product supply must be restricted.
• B) In a command economy, state-owned enterprises have little incentive to control costs and be efficient.
• C) The sole role of government in a command economy is to encourage vigorous free and fair competition between private producers.
• D) Mixed economies were once uncommon throughout much of the world, although they are becoming much popular now.
• E) Production in command economies is determined by the interaction of supply and demand and signaled to producers through the price system.

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Definitions:

Posttax Distribution

The distribution of income or assets among various groups after accounting for the effects of taxation.

Transfer Distribution

The allocation or reallocation of income or wealth through mechanisms other than market transactions, such as taxation or welfare payments.

Noncash Transfer

A government transfer payment in the form of goods and services rather than money, for example, food stamps, housing assistance, and job training; also called in-kind transfers.