Which of the following best describes a free enterprise system?

• A. The government owns and controls all major industries.
• B. All resources are allocated based on tradition and custom.
• C. Prices are set by a central planning authority.
• D. Individuals and businesses are free to make their own economic choices with minimal government intervention.

Answer: (D)

Verified step by step guidance

1. Understand the concept of a free enterprise system, which is an economic system where individuals and businesses have the freedom to make their own economic decisions.
2. Recognize that in a free enterprise system, government intervention is minimal, meaning the government does not control or own major industries or set prices centrally.
3. Compare the given options to the characteristics of a free enterprise system: government ownership and control, allocation by tradition, and central price setting do not align with free enterprise principles.
4. Identify that the option stating 'Individuals and businesses are free to make their own economic choices with minimal government intervention' best matches the definition of a free enterprise system.
5. Conclude that the correct description emphasizes economic freedom and limited government role, which are key features of a free enterprise system.