Correct Response: A. A mixed economic system combines elements of socialism and the free market. In most cases this results in public services such as education, social security, and government subsidizing of transportation and health care, alongside the accumulation of capital, private property, and for-profit businesses. The goal of financing public services using a portion of the country's economic resources is to ensure that individuals have knowledge, skills, and health to function in the global marketplace, which tends to reduce social and economic inequality. Free-market capitalism is much more likely to result in greater social and economic inequality, since capitalism creates winners and losers, and over time tends to result in a small percentage of the population controlling the majority of a country's wealth. Free-market capitalism tends to maximize rates of productivity and economic growth since there are no government regulations to control or slow excessive production and consumption (B). Free-market systems respond quickly to either scarcity or oversupply, whereas these problems can be unintended consequences of government intervention in the economy (C). Free- market capitalism usually offers greater choice since individuals are free to innovate and compete, resulting in the generation of more products for consumers (D).
