HISET Social Studies Practice

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Study for the HISET Social Studies Test. Access practice exams and detailed explanations to boost your confidence. Prepare effectively and succeed in your test!

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In which economic system does the government control the means of production?

Capitalism
Socialism
Mixed economy
Free market

The correct answer is: Socialism

The correct answer is socialism because, in this economic system, the government plays a significant role in controlling the means of production and distributing resources. In socialism, the idea is to ensure that wealth and goods are distributed more equitably among the population. This governmental control can take various forms, such as ownership of industries, regulation of prices and production levels, and the provision of public services. In contrast, capitalism emphasizes private ownership of the means of production, where individuals or companies operate businesses for profit with little government intervention. A mixed economy combines elements of both capitalism and socialism, incorporating both private enterprise and government regulation to varying degrees. The free market system relies on supply and demand, with minimal government involvement, facilitating competition and voluntary trade among individuals and businesses.