Which scenario indicates a relatively high level of economic freedom?

• A. The government strictly controls prices and production decisions.
• B. Private property is prohibited and all assets are owned by the state.
• C. All resources are allocated by central planning authorities.
• D. Individuals are free to start businesses with minimal government intervention.

Answer: (D)

Verified step by step guidance

1. Understand the concept of economic freedom, which generally refers to the ability of individuals and businesses to make their own economic decisions with minimal government interference.
2. Analyze each scenario by identifying the level of government control over economic activities such as pricing, production, ownership, and resource allocation.
3. Recognize that strict government control over prices and production, prohibition of private property, and central planning indicate low economic freedom because they limit individual choice and market mechanisms.
4. Identify that the scenario where individuals are free to start businesses with minimal government intervention reflects a high level of economic freedom, as it allows private ownership and market-driven decisions.
5. Conclude that economic freedom is highest when individuals have the liberty to engage in economic activities without excessive restrictions or controls imposed by the government.