1
QuizMultiple Choice

Comparing Economic Systems

Question 1 • EA Academy Civics 9

What is one disadvantage of a market economy?

Answer
A
A market economy creates income inequalities.
B
A market economy discourages innovation.
C
A market economy reacts slowly to changing needs.
D
A market economy limits competition and profit.

Explanation

In a market economy, people and businesses can earn different amounts based on factors such as their skills, resources, and success. This can lead to significant income inequalities, which is a commonly cited disadvantage. Market economies generally encourage innovation, respond to changing needs through supply and demand, and promote competition and profit.

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