Which of the following statements is accurate about most economies?

• A. Most economies rely exclusively on central planning to allocate resources.
• B. Most economies operate solely as pure market economies without any government involvement.
• C. Most economies are mixed, combining elements of both market and government intervention.
• D. Most economies do not face the problem of scarcity.

Answer: (C)

Verified step by step guidance

1. Understand the concept of economic systems: Economies can be broadly categorized into market economies, command (central planning) economies, and mixed economies.
2. Recall that a pure market economy relies entirely on supply and demand with minimal or no government intervention, while a command economy relies exclusively on central planning by the government.
3. Recognize that in reality, most economies are mixed economies, meaning they combine elements of both market mechanisms and government intervention to allocate resources.
4. Remember the fundamental economic problem of scarcity, which means resources are limited and choices must be made; this problem exists in all economies regardless of their type.
5. Conclude that the accurate statement is that most economies are mixed, combining market forces with government involvement, rather than relying solely on central planning or pure market mechanisms.