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Question : Which of these is not a characteristic of a free-enterprise economy?

Option 1: Decisions are based on the forces of demand and supply.

Option 2: Factor rewards are based on the productivity of factors of production.

Option 3: All economic decisions are taken by the economic planners.

Option 4: Economic decisions are regulated by the market.


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: All economic decisions are taken by the economic planners.


Solution : The correct answer is All economic decisions are taken by the economic planners.

A free enterprise economy is also known as a free-market economy or capitalism. Free enterprise economies are often associated with market-driven economies, where supply and demand determine prices and the allocation of resources. Some of the characteristics of free enterprise are:

  1. Private Ownership
  2. Economic Freedom
  3. Competition
  4. Profit motive
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