Which statement best describes a pure market economy?

Producer intervention in economic choices is strictly forbidden. The government determines economic choices and makes most decisions. The decisions made by producers and consumers drive all economic choices. Producers and consumers make some economic choices while the government makes others.

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3 October, 03:07

Which statement best describes a pure market economy?

Producer intervention in economic choices is strictly forbidden. The government determines economic choices and makes most decisions. The decisions made by producers and consumers drive all economic choices. Producers and consumers make some economic choices while the government makes others.

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Ean Alvarez · Answer 1

The answer is: The decisions made by producers and consumers drive all economic choices

This is confirmed by Adam Smith's, a British that founded the base of modern economics, and a laissez-faire and free market defender, in his Invisible Hand Theory, which says that free individuals living in a free economy, at the time of making decisions, looking for their own self-interests, take actions that benefited society even though that were not the main objective of these actions.

In this theory, government intervention in economy is seen as neither desirable nor necessary.