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Effects of an Open Economy

Who dictates ...

Question

Who dictates price in a free market economy?

A

The Reserve Bank ofIndia

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B

Market forces of demand and supply

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C

The World Bank

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D

The Government

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Solution

The correct option is B Market forces of demand and supply
The prices in a free market are determined by the market forces through the interactions of supply and demand in the marketplace.
Where demand is the quantity of a product that buyers are willing to purchase according to a given price and supply is the amount of a product that sellers can give to customers at a given price.

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