Question

Carrie works at a canned food production factory. The government wanted to give a boost to the salt industry, so it lined up numerous subsidies and tax exemptions for the sector. This led to a decrease in production costs. This also meant that consumers could access canned foods at a lower price, which led to an increase in demand for the product. Which kind of economic system is Carrie's company dealing with?

A) Capitalist
B) Socialist
C) Mixed
D) Command

Answer 1

Carrie's company operates in a mixed economy where both the private sector and government interventions, such as subsidies, play a significant role in economic decisions.

Step-by-step explanation:

Carrie's company is dealing with a mixed economy. This type of economy features a blend of private sector activity and governmental intervention - in this case, through subsidies and tax exemptions provided by the government to support certain industries. While Carrie's company operates in a market where firms and consumers typically make economic decisions, the government's involvement in decreasing production costs and influencing demand through policy tools is a characteristic of a mixed economy. Economies utilize subsidies to promote sectors considered strategically important or beneficial for society, as seen in the canned food production or renewable energy industries.