Future Business Leaders of America (FBLA) Agribusiness Practice Test

What type of market allows for transactions with minimal government intervention?

1. Command Economy

2. Free Enterprise

3. Closed Economy

4. Centralized Economy

The correct answer is: Free Enterprise

The type of market that allows for transactions with minimal government intervention is a free enterprise system. In a free enterprise economy, individuals and businesses are free to engage in economic activities of their choosing. This system is characterized by voluntary exchanges in a market where the forces of supply and demand primarily dictate the prices of goods and services. In these markets, the role of government is limited to protecting property rights and maintaining the rule of law, rather than controlling the means of production or dictating what is produced. This results in a more dynamic economy where innovation, competition, and consumer choices drive the market. The reliance on private ownership and the freedom for businesses to operate with minimal regulation fosters efficiency and growth. In contrast, command and centralized economies involve significant government control over economic activities, which limits the ability of individuals and businesses to make independent decisions in the marketplace. Similarly, closed economies restrict international trade and investment, leading to less competition and fewer options for consumers. Thus, the defining characteristic of a free enterprise market is its minimal government intervention, allowing for greater personal and economic freedom.