Test: Economic Systems - JAMB MCQ

In a free enterprise economy, private individuals and businesses own the resources, and the market forces of supply and demand determine the allocation of goods and services.

In a centrally planned economy, the allocation of resources is primarily determined by a central planning authority, such as the government, which makes decisions regarding production, distribution, and consumption.

A mixed economy combines elements of both free enterprise and centrally planned economies. It includes both private ownership of resources and government intervention to regulate and correct market failures.

Economic reforms such as deregulation, banking sector consolidation, and cash policy reform are examples of government intervention aimed at improving the functioning of the economy and addressing specific issues or challenges within the economic system.

The mixed economy allows for government intervention to correct market failures and promote social welfare. Government regulations and policies are implemented to address inequalities, provide public goods and services, and ensure fair competition.

The objective of economic systems is to efficiently allocate scarce resources in order to meet the needs and wants of individuals and society as a whole. The goal is not to maximize government control or individual profits but to ensure optimal resource allocation.

In a free enterprise economy, prices are primarily determined by the forces of supply and demand in the market. Buyers and sellers interact freely, and prices adjust based on the levels of supply and demand for goods and services.

The centrally planned economy is most likely to prioritize income equality and social welfare. In this system, the government has significant control over resource allocation and can implement policies to redistribute income and provide social welfare programs.

Agricultural subsidies are a contemporary issue in economic systems. They involve government support to farmers to stabilize agricultural production, protect domestic markets, and ensure food security.

Recent economic reforms in Nigeria have focused on encouraging foreign investment to stimulate economic growth, attract capital inflows, and improve the country's competitiveness in the global market.