Future Business Leaders of America (FBLA) Marketing Practice Test

In which type of economic system does the government control significant resources?

1. Free market economy

2. Mixed economy

3. Controlled economy

4. Capitalist economy

The correct answer is: Controlled economy

The correct choice is a controlled economy, which is characterized by significant government control over resources and economic activities. In this type of economic system, the government often dictates what goods are produced, how much of them are produced, and at what prices they are sold. This level of control is intended to achieve specific economic goals, such as equity, social welfare, or the direction of resources toward certain industries. In contrast, a free market economy fundamentally relies on individual decision-making and market forces to determine resource allocation, with minimal government intervention. A mixed economy combines elements of both free markets and government control, where the government may intervene in certain sectors while allowing market forces to operate in others. A capitalist economy primarily refers to a system driven by private ownership and free markets with limited government intervention, focusing on profit-making and competition. Thus, while each of these other economic systems has its characteristics, they do not have the level of government control found in a controlled economy.