Case Interview Prep

Category - Economics

The following are advantages of the free-market economy EXCEPT:
  1. restricted transmission of information between consumers and producers
  2. lack of costly red tape and bureaucracy
  3. built-in incentives for efficiency
  4. competitive producers respond to consumer wishes
Explanation
Answer: A - Among the advantages of the free-market economy is the open transmission of information between consumers and producers.

Key Takeaway: The free-market economy has a number of advantages that include open transmissions of information between consumers and producers and the absence of costly red tape bureaucracy. This type of economic system also possess built-in incentives for efficiency as producers aim to reduce costs and increase profits. Finally, a free-market economy allows competition amongst producers to a greater response to consumer wishes.
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