Which of the following is true of a market system?

BlackTom题目解析

Question

Which of the following is true of a market system?

BlackTom题目解析

BlackTom AI · Accepted Answer

Question restatement: Which of the following is true of a market system? BlackTom题目解析

Option 1: 'A market system discourages innovation.' This claim is generally false in standard economic theory, since market systems often rely on competitive pressures and private enterprise to incentivize new ideas, product improvements, and efficiency gains. However, critics might point to certain contexts where regulation or short-term profit motives could dampen risky innovatio, but the blanket statement that markets discourage innovation is not accurate.

Option 2: 'A market system discourages competition.' This is incorrect because one of the core features of a market system is the presence of competition among buyers and sellers. Competition tends to drive efficiency, lower prices, and better products; saying markets discourage competition contradicts the fundamental mechanism of price signals and entry/exit that characterize competitive markets.

Option 3: 'A market system is a combination of centralized government initiatives and decentralized actions taken by firms.' This aligns with the standard view that market economies operate through a mix of voluntary actions by firms and households within a framework established by government policies, laws, and institutions. The government provides rules, enforcement, and sometimes public goods or interventions, while firms and individuals engage in decentralized decision-making that allocates resources efficiently through prices and voluntary exchange. This nuanced description captures the interacting roles of state and market forces.

Option 4: 'A market system is characterized by government ownership of sources of production.' This describes a more socialist or state-led economic arrangement (where the government owns the means of production), rather than a typical market system. In a pure market system, ownership tends to be private rather than publicly owned, so this statement is inaccurate for a market system.

In summary, analyzing each option reveals that option 3 correctly characterizes a market system as involving both centralized government frameworks and decentralized firm-level actions, while the other options misstate or oversimplify key aspects of how market systems function.

Which of the following is true of a market system? BlackTom题目解析

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