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An economy is NOT classified as a pure capitalist market economy if which statement is true?

A: There is government allocation of resources,
B. The factors of production are privately owned.
C. Economic incentives affect consumer behavior.
D. Business owners make decisions based on profit motives.

User PatriceG
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Final answer:

An economy is not a pure capitalist market economy if there is government allocation of resources (option A), which means government intervention is involved in the allocation, typical of mixed or command economies, rather than a pure capitalist system.

Step-by-step explanation:

An economy is not classified as a pure capitalist market economy if there is government allocation of resources, which is statement A. In a pure capitalist market economy, the factors of production are privately owned, economic incentives affect consumer behavior, and business owners make decisions based on profit motives.

The presence of government allocation of resources indicates some level of government intervention, typical of a mixed economy or command economy, rather than a pure capitalist system where market forces and private ownership dictate the allocation of resources.

Most modern economies, including that of the United States, are mixed economies where both private and government entities play a role in resource allocation, even if the private sector frequently dominates.

A key distinction of capitalist economies is the minimal involvement of governments in the markets, focusing primarily on enforcing private property rights and maintaining the rule of law rather than directly managing the production and distribution of goods and services.

User Zaman Sakib
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