The Free Market System Is Also Called Capitalism and Is

question 2

Multiple Choice

The free market system is also called capitalism and is characterized by all of the following attributes except ________.

• A) Individuals and companies may compete for their own economic gains
• B) Private property ownership and wealth are permissible
• C) Free market forces determine prices
• D) Government is expected to help regulate the market
• E) All of the above are attributes

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Definitions:

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in its price, indicating a high price sensitivity.

Inelastic Demand

Refers to a situation where the demand for a product is relatively unresponsive to changes in price.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.

Good Substitutes

Products or services that can be used in place of each other, with consumers willing to switch from one to the other if the price or quality changes.