Imagine you are a consultant who has been asked to summarize the strengths and weaknesses of Agoria, a nation with a pure market

Question

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Imagine you are a consultant who has been asked to summarize the strengths and weaknesses of Agoria, a nation with a pure market

economy.Which of the following would you include in your report as weaknesses of Agoria's economy? Check all that apply.Occupational choices can be restricted.The economy experiences economic fluctuations, which are alternating periods of expansions and recessions in their level of economic activity, especially in employment and production.Because government is responsible for all production, the variety of products tends to be limited.People with no resources to sell could starve (income is distributed unequally).

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1 answer:

Nady [3.6K] · Answer 1 · 2026-04-06T22:59:37+03:00

Answer:

As a consultant, two notable weaknesses can be recognized: Economic fluctuations affect the economy, and individuals with no sellable resources could face starvation

Explanation:

In a purely market-driven economy, resources are allocated based solely on supply and demand dynamics. Assuming a closed economy (without imports or exports), void of different actors (like the government), and that all traded goods are perfectly competitive (neither public nor semi-public goods), the market would effectively allocate resources. However, this is not accurate, and an open economy with imperfections means that any external circumstances lead to economic fluctuations, leaving workers with non-demanded offerings without jobs, potentially driving them out of the market.