Socialism and communism are both variations of a free-market economy.
Level of Learning 1: Knowledge of key terms

Question

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This statement is false. Socialism and communism are both economic systems that seek to replace or drastically reform capitalism, which is a type of free-market economy. However, socialism and communism involve different degrees of government control and ownership of resources, while free-market economies prioritize private ownership and competition.

Socialism and Communism Are Both Variations of a Free-Market Economy