701. In a market economy, who determines what goods and services are produced?
A) Government officials.
B) Consumers and businesses responding to market demand.
C) Producers only.
D) Non-profit organizations.
702. How does a market economy handle income distribution?
A) Through government-imposed income equality.
B) Income distribution is determined by market forces and individual choices.
C) Income distribution is ignored.
D) Income distribution is determined randomly.
703. What is the role of consumer sovereignty in a market economy?
A) Consumers have no influence.
B) Consumers determine what goods and services are produced through their purchasing decisions.
C) Consumers are controlled by the government.
D) Consumers follow government directives.
704. How does a market economy encourage efficiency?
A) Through government regulations.
B) Through competition and the pursuit of profit.
C) Efficiency is irrelevant.
D) Through centralized planning.
705. What is the role of supply and demand in a market economy?
A) Supply and demand are irrelevant.
B) Supply and demand determine prices and quantities of goods and services.
C) Supply and demand are controlled by the government.
D) Supply and demand are randomly determined.
706. How are profits and losses handled in a market economy?
A) Profits and losses are controlled by the government.
B) Businesses earn profits or incur losses based on market performance.
C) Profits and losses are irrelevant.
D) Profits and losses are distributed equally among all businesses.
707. What is the role of self-interest in a market economy?
A) Self-interest is discouraged.
B) Self-interest motivates individuals and businesses to pursue their goals.
C) Self-interest is controlled by the government.
D) Self-interest is irrelevant.
708. How does a market economy address the problem of scarcity?
A) Scarcity is ignored.
B) Scarcity is addressed through efficient allocation of resources based on market signals.
C) Scarcity is controlled by the government.
D) Scarcity is randomly determined.
709. What is the impact of innovation in a market economy?
A) Innovation is discouraged.
B) Innovation is controlled by the government.
C) Innovation leads to economic growth and improved living standards.
D) Innovation has no impact.
710. How does a market economy handle economic recessions?
A) Recessions are controlled by the government.
B) Economic recessions may self-correct through market adjustments.
C) Recessions are ignored.
D) Recessions are determined by random factors.
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