HISET Social Studies Practice

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Prepare for the HISET Social Studies Test with comprehensive quizzes including flashcards and multiple-choice questions. Get ready to confidently tackle your exam!

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In which economic system are individuals and businesses allowed to compete for profit with minimal government interference?

Socialism
Command economy
Free enterprise
Mixed economy

The correct answer is: Free enterprise

The correct choice is identified as the system where individuals and businesses have the freedom to engage in competition for profit with minimal government interference, which is characteristic of a free enterprise system. In this economic model, the market largely dictates what products are created, how they are priced, and how resources are allocated based on supply and demand. Entrepreneurs and private firms can innovate and make decisions without heavy regulatory restrictions, promoting efficiency and consumer choice. In contrast, socialism involves significant government control over the means of production and aims for equal distribution of resources, reducing individual competition for profit. A command economy is one where the government makes all the decisions regarding the economy, such as what to produce and how much. Lastly, a mixed economy incorporates elements of both free market and government intervention, blending the freedom of competition with regulatory measures, but it doesn't emphasize minimal interference to the same extent as a free enterprise system does.