Which term describes the way an economy is organized in terms of ownership and decision-making regarding resources?

The term "Economic System" accurately describes the framework within which an economy operates, focusing on how resources are owned and how decisions regarding their use are made. Economic systems can vary significantly, with different models such as capitalism, socialism, and mixed economies highlighting distinct approaches to ownership and resource allocation.

In a capitalist economy, for instance, resources are primarily owned by private individuals or businesses, and decision-making is decentralized, allowing market forces to dictate the allocation of resources. Conversely, in a socialist system, the government often plays a significant role in managing resources and making decisions on behalf of the community. The concept of economic systems encompasses these variations and sheds light on the underlying principles that shape economic interactions within a society.

The other terms, while related to economics, do not encompass the same breadth of meaning. A market economy refers specifically to an economic system where supply and demand drive prices and production, but it doesn’t capture the full range of ownership structures. The price system discusses how prices are determined within an economy, and the profit model is concerned with how businesses approach profit-making, neither of which defines the overall organization of an economy.