Which of the following statements about market economies is true?
A)Most present-day economists advocate extensive government intervention in most parts of market economies.
B)Externalities make free-market outcomes socially efficient.
C)An important characteristic of the market system is its ability to set in motion forces that tend to correct disequilibrium.
D)Market failure means that a market economy is incapable of satisfying human wants.
E)Pure market economies provide the best social outcome.

Question

Quizplus · Accepted Answer

The ability of the market system to self-correct and move toward equilibrium is one of the key characteristics of a market economy. Externalities, market failure, and the belief in pure market economies without any government intervention are all points of debate among economists, but C is a true statement about market economies in general.

Which of the Following Statements About Market Economies Is True