In a free enterprise economy, resource allocation is determined by :

(A) the pattern of consumers spending
(B) the wealth of the entrepreneurs
(C) decision of the Government
(D) the traditional employment of factors

Correct Answer : the pattern of consumers spending
Explanation : In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend.
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