Which term describes a system in which economic decisions are made by private individuals and businesses with little government intervention?

Which term describes a system in which economic decisions are made by private individuals and businesses with little government intervention?

• A. Legislative Branch
• B. Law
• C. Market economy
• D. Latitude

Answer: (C)

In a market economy, economic decisions are made by private individuals and businesses with little government intervention. Private property and voluntary exchange let people decide what to produce, how to produce it, and for whom, while prices created by supply and demand guide those choices. When demand for a good rises or falls, prices adjust, signaling producers to increase or decrease output. This system emphasizes competition, consumer choice, and limited government roles—typically focusing on enforcing laws, protecting property rights, and maintaining fair markets rather than directing production. The other terms don’t describe this setup: the legislative branch is a part of government that makes laws, not an economic system; law refers to rules governing behavior, not how economies organize production; latitude is a geographic coordinate with no bearing on economic organization.

In a market economy, economic decisions are made by private individuals and businesses with little government intervention. Private property and voluntary exchange let people decide what to produce, how to produce it, and for whom, while prices created by supply and demand guide those choices. When demand for a good rises or falls, prices adjust, signaling producers to increase or decrease output. This system emphasizes competition, consumer choice, and limited government roles—typically focusing on enforcing laws, protecting property rights, and maintaining fair markets rather than directing production.

The other terms don’t describe this setup: the legislative branch is a part of government that makes laws, not an economic system; law refers to rules governing behavior, not how economies organize production; latitude is a geographic coordinate with no bearing on economic organization.