Question

High SchoolBusiness7 days ago Canada has a market economy. As such, Canada's economy (relative to centrally planned economies) tends to result in:_______. A. equity but not necessarily productive efficiency or allocative efficiency. B. allocative efficiency and equity but not necessarily productive efficiency. C. allocative efficiency but not necessarily productive efficiency or equity. D. productive efficiency and allocative efficiency but not necessarily equity. E. productive efficiency but not necessarily allocative efficiency or equity.

Answer 1

Answer:

D) productive efficiency and allocative efficiency but not necessarily equity.

Explanation:

Countries that have a market economy are capitalistic countries and those that favor command economies (centrally planned) are called socialist countries. No country is totally capitalistic (since governments, taxes, regulations, etc., exist), and no country is totally socialist either. But countries are classified depending on which economic system they favor.

Canada favors free markets, and by doing so, it allows market forces to allocate resources. Consumers are free to decide what to buy and at what price, and producers are free to decide what to sell and at what price. Since private actors are free to decide how to allocate resources, they are allocated more efficiently.

But the negative aspect of capitalism is that income and wealth distribution is very unequal.