Question 3
Economic SystemsOne of the features of a free market economy is that
- A.resources are directed by the price mechanism
- B.workers do not earn equal wages
- C.the profit motive is severely constrained
- D.decisions on the economy are taken by bureaucratic structures.
Show the answer and explanation
Answer: A (resources are directed by the price mechanism)
Explanation
In a free market economy, prices set by demand and supply decide what is produced and where resources go.