What mechanisms exist for resolving disputes in a free enterprise system?

What mechanisms exist for resolving disputes in a free enterprise system?

• A. Negotiation and compromise only
• B. Arbitration processes and courts
• C. Public opinion and media intervention
• D. Government intervention only

Answer: (B)

In a free enterprise system, arbitration processes and courts play a critical role in resolving disputes. These mechanisms provide structured and impartial means for parties involved in a disagreement to seek resolution. Arbitration involves a neutral third-party arbitrator who hears both sides of the case and makes a binding decision, which can be more efficient and less formal than going to court. On the other hand, the court system allows for disputes to be resolved through legal proceedings, in which judges or juries evaluate evidence and render a verdict based on the law.

These methods ensure that disputes are handled fairly, maintaining order and trust within the market. This framework is essential in a free enterprise economy, as it helps businesses and individuals resolve conflicts that could otherwise lead to significant disruptions or inefficiencies in the marketplace. Access to these mechanisms promotes stability, encourages investment, and fosters economic growth by ensuring that there are clear, established ways to handle disputes when they arise.