Question

Decide whether each of the following descriptions most closely corresponds to being part of a command system, a market system, or a laissez-faire system.
a. A woman who wants to start a flower shop finds she cannot do so unless the central government has already decided to allow a flower shop in her area:
b. Shops stock and sell the goods customers want but the government levies a sales tax on each transaction to fund elementary schools, public libraries, and welfare programs:
c. The only taxes levied by the government are to pay for national defense, law enforcement, and a legal system designed to enforce contracts between private citizens:

Answer 1

Answer:

a. Command system

b. Market system

c. Laissez-faire system

Explanation:

a. Command System, This is an economic system where the means of production and distribution of goods and services are owned and control by the government, in this system, the economic activities are controlled by a central planning committee.

b. Market system: A market system is an economic system where the market forces, that is the forces of demand and supply allocate resources.

c. Laissez-faire system : Under the Laissez-faire system is an economic system in where there is minimum government intervention in the economy. sometimes the words Laissez-faire system and capitalism are used interchangeably. The major difference between capitalism and laissez faire depends on the extent of government interference in the economy.