An economic system
A) requires a grouping of private markets linked to one another.
B) is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem.
C) requires some sort of centralized authority (such as government) to coordinate economic activity.
D) is a plan or scheme that allows a ﬁrm to make money at some other ﬁrm's expense.

Question

Quizplus · Accepted Answer

An economic system is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem. It involves how resources are allocated and goods and services are produced and distributed within a society. Examples of economic systems include capitalism, socialism, and mixed economies. Private markets and government intervention can both be components of an economic system, but they are not the defining characteristic. D is incorrect as it describes a predatory business practice, not an economic system.

An Economic System