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WAEC Economics 2025 Question 1

Question 1

Economic Systems

One advantage of a free market economy is that it

  1. A.gives incentives for innovation.
  2. B.guarantees full employment of labour.
  3. C.allocates resources to produce public goods.
  4. D.guarantees income equality.
Show the answer and explanation

Answer: A (gives incentives for innovation.)

Explanation

Profit rewards firms that develop new and better products.