Question

(HC)Which statement explains why a follower of laissez-faire capitalism would argue that the economy grows when government avoids regulations?

In a planned economy, lack of regulations increases wages and profits.
In a free market economy, prices and wages result from natural forces.
In a mixed economy, wages rise faster than profits.
In a capitalist system, government limits businesses.

Answer 1

b : In a free market economy, prices and wages result from natural forces.

Answer 2

In a free market economy, prices and wages rise from natural forces. Laissez-faire capitalism is when the government separates itself from the economy, much like the government (in the US at least) currently distances itself from the church through separation of church and state.