________is a market where economic agents can freely exchange their endowments with each other.
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CUET ECONOMIC Previous Year Paper 2024
Market economy
Correct AnswerCentrally planned economy
Incorrect AnswerAggregate demand based economy
Incorrect AnswerAggregate supply based economy
Incorrect AnswerExplanation:
- Market economy is a system where economic agents can freely exchange their endowments with each other. Supply and demand determine prices, and the government has minimal intervention.
- Centrally planned economy is characterized by the government making all decisions about the production and distribution of resources. Individuals have little control over what they produce or consume.
- Aggregate demand based economy focuses on total demand within the economy, but it is not a standalone type of economic structure.
- Aggregate supply based economy is centered on the total supply but similarly isn't a standalone type of economic structure.
- Answer: Market economy is correct as it fits the description given.
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