Which economic doctrine argues for minimal government interference in the economy in favor of free markets and free trade?

• A. Command Economy
• B. Mercantilism
• C. Import Substitution
• D. Neoliberalism

Answer: (D)

The central idea being tested is a belief in free markets with minimal government interference. Neoliberalism argues that economies allocate resources most efficiently when government steps back and markets are allowed to operate freely, with trade kept open. It promotes deregulation, privatization of state-owned enterprises, and lowering tariffs and other barriers to international trade, trusting competition and private initiative to drive growth. Government’s role is still present but focused on maintaining stable monetary policy, enforcing contracts, protecting property rights, and providing a predictable legal framework, rather than directing production or shielding industries.

This fits the prompt because it emphasizes free markets and free trade as the preferred path, unlike a command economy that relies on central planning, mercantilism which centers on protecting domestic production and accumulating wealth through trade controls, or import substitution which uses tariffs to build domestic industries.