Question

Match the economic system to its definition.

1. market economy:
2. mixed economy:
3. command economy:
4. traditional economy:

a. an economy where a central government determines both the allocation of resources and the production of goods and services
b. an economy where cultural determines both the allocation of resources and the production of goods and services
c. an economy where price signals, resulting from supply and demand forces within the economy, determines the allocation of resources and the production of goods and services
d. an economy that takes elements from both a market economy and a command economy to allocate resources and determine the production of goods and services

Answer 1

Here are the correct matches of the economic systems to their definitions:

1. market economy: **c.** an economy where price signals, resulting from supply and demand forces within the economy, determines the allocation of resources and the production of goods and services

2. mixed economy: **d.** an economy that takes elements from both a market economy and a command economy to allocate resources and determine the production of goods and services

3. command economy: **a.** an economy where a central government determines both the allocation of resources and the production of goods and services

4. traditional economy: **b.** an economy where culture determines both the allocation of resources and the production of goods and services