A market economy is simply an economic system that the investment decision, production decision and the distribution decision are guided through price signals which have been created by demand and supply forces.
A command economy is simply an economic system that the investment decision, production decision and the distribution decision are under the guidance of the government. A command economy preaches fairness and equality.
While a market economy promotes economic efficiency, economic freedom and economic growth; it does not promote economic security. Economic security has to do with having an income which will be vital in the maintenance and sustenance of a standard of living.
I think the correct answer from the choices listed above is the second option. The best definition for mercantilism would be that it is an economic policy in which countries collect gold or silver and control trade. Hope this answers the question. Have a nice day.
