In which type of economic system does the government play the smallest role?

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

Answer: (C)

Verified step by step guidance

1. Understand the four types of economic systems: Traditional, Command, Mixed, and Market economies.
2. Recognize that in a Command economy, the government has a central role in making economic decisions and controlling resources.
3. Know that a Mixed economy combines elements of both government control and private enterprise, so the government has a moderate role.
4. Identify that a Traditional economy relies on customs and traditions, with minimal government intervention but often limited economic development.
5. Conclude that a Market economy is characterized by minimal government involvement, where decisions about production and consumption are driven primarily by individuals and businesses through supply and demand.