Final answer:
In a free-market system, the closest to accurate is that all economic decisions are made without government intervention, representing laissez-faire economics. However, complete absence of government regulation is not practical, and even market economies require some forms of government regulation to function properly and protect public welfare. The correct answer is option: all economic decisions are made without government intervention.
Step-by-step explanation:
In a free-market system, the ideal is that all economic decisions are made without government intervention. This idea is known as laissez-faire economics, and it suggests that the market operates best when supply and demand are not interfered with by governmental control. However, in reality, a completely free market without any government regulation does not exist, as regulations are necessary for maintaining an even playing field, enforcing contracts, preventing fraud, and protecting citizens.
In the United States, the historical approach to laissez-faire was most apparent in the late 1800s when businesses operated with minimal government involvement. Over time, it became clear that some government regulation was necessary to prevent monopolies, ensure fair competition, and protect the public welfare. This led to the concept of a "modified free enterprise economy" where the government plays a role in regulating business to various extents for the overall benefit of the economy and its participants.
Therefore, it's not accurate to say that in a free-market system the government entirely refrains from regulating business, as some level of government support and intervention is always part of a functioning market economy. The correct statement reflecting a true free-market system without intervention would be that 'all economic decisions are made without government intervention,' but this is more theoretical than practical in modern economies.