If there is no central planning authority to make the fundamental economic decisions and thus to allocate productive resources, how can then free…

CA Foundation · Business Economics · MTP · June 2024
If there is no central planning authority to make the fundamental economic decisions and thus to allocate productive resources, how can then free enterprise or capitalist economy solve its central Economic problems?
(A) A. Through the power of God
(B) B. On the basis of decision taken by industrial groups.
(C) C. The free market economy uses the impersonal forces of the market to solve its central problems
(D) D. None of these

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. The free market economy uses the impersonal forces of the market to solve its central problems

Topics: Public Finance

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