In Lubenir, a country in South America, its citizens can own capital, make decisions about how to use it, and reap the returns or losses of their business activities. Given this information, it can be said that Lubenir has a _____.

A) mercantilist economy
B) traditional economy
C) command-based economy
D) market-based economy

Market-based Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Mercantilist Economy

An economic theory and practice dominant in modern Europe, advocating for governmental regulation of a nation's economy to augment state power at the expense of rival national powers.

Traditional Economy

An economic system rooted in historic practices and customs, relying on barter and subsistence farming, often with minimal use of technology.