Which type of economy is most prevalent in the world today?

• A. Traditional economy
• B. Command economy
• C. Mixed economy
• D. Market economy

Answer: (C)

Verified step by step guidance

1. Understand the definitions of each type of economy: A traditional economy relies on customs and traditions to make economic decisions; a command economy is centrally planned by the government; a market economy is driven by supply and demand with minimal government intervention; and a mixed economy combines elements of both market and command economies.
2. Recognize that most countries today do not operate purely under one system but rather combine government regulation and market forces to varying degrees.
3. Identify that a mixed economy allows for private enterprise and government intervention to coexist, balancing efficiency with social welfare.
4. Consider real-world examples where governments regulate markets to correct failures, provide public goods, and ensure economic stability, which is characteristic of mixed economies.
5. Conclude that the mixed economy is the most prevalent type worldwide because it incorporates the benefits of both market mechanisms and government oversight.