Economics (definitions): Define a free market. Focus on how prices and resource allocation are determined and the role of government. Choose the most accurate definition.
General Knowledge
Basic General Knowledge
Difficulty: Easy
Choose an option
Answer
Correct Answer: An economy where prices are set by supply and demand with minimal government intervention
Explanation
Given data
- Term: Free market.
Concept/Approach A free market is characterized by voluntary exchange, private property, competition, and price signals emerging from supply and demand with limited regulatory controls.
Reasoning • Option (a) correctly captures price formation and the limited role of the state. • Options (b), (c), (d) contradict core features of a free market.
Final Answer An economy where prices are set by supply and demand with minimal government intervention