The central coordinating mechanism in a market economy.
Explanation of Solution
A market economy is a system in which decisions related to the economy and the pricing of products and services are directed by the exchanges that take place between country’s citizens and businesses. The central coordinating mechanism in a market economy is the
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Chapter 3 Solutions
Macroeconomics
- Why is the law of demand and the law of supply a useful economic model?arrow_forwardIn a market system, provide an example for when government can enhance or harm any of the processes involved in terms of what should be produced, how it should be produced, and for whom.arrow_forwardWhat are the types of economic systems? How will you differentiate Command from a Market economy?arrow_forward
- Why do most economies in the world today operate somewhere in between a market economy and a command economy?arrow_forwardWhat are the main differences between a capitalist (market-based) and socialist (command) economic system?arrow_forwardName a type of market failure and explain why this market failure results in economic inefficiencies.arrow_forward
- Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co