Question

choose the correct asnwer

39) An economy that's resource allocation is directed by the price mechanism and limited public sector involvement is typically referred to as a socialistic economy. Omarket economy. Ocontrol economy command economy

Answer 1

Answer: market economy

In a market economy, the resource allocation is directed by the price mechanism which is determined by the demand and supply and not by the government. Hence it is the correct answer.

A socialist economy is one which is controlled by the government to ensure welfare and equal opportunity to the people. Hence it is incorrect.

A control or command economy is one in which government controls the resource allocation. Hence the same are incorrect.