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Question

In a free economy the central problem facing a society is solved by ______.

A
market forces or price mechanism
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B
central planning committee
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C
central bank
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D
parliament
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Solution

The correct option is C market forces or price mechanism

In a free economy, the central problem facing society is solved by the market forces or the price mechanism. Price-mechanism is an important feature of this economy. In this, the prices are determined by the free interaction of the forces of demand and supply. It is an automatic self-regulating mechanism that runs with the motive of profit.


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