Question

In which type of economy do the forces of supply and demand typically drive prices?

a. a market economy
b. a traditional economy
c. a planned economy
d. a command economy

Answer 1

Letter A. A Market Economy

Step-by-step explanation:

In the market economy prices are determined in the process of interaction between producers and consumers in the market itself. Thus, through the interaction between supply and demand, prices are defined, with no state intervention or any other agent. Thus, in a market economy prices will oscillate according to the supply of demand for goods.

Answer 2

The kind of economy that is determined by supply and demand is a market economy - answer a) is the correct one

In a command and planned economies the government decides over prizes and production (the two are roughly synonymous).

A traditional economy is an economy based on exchange, not money.