Question on: WAEC Economics - 2017
in a market economy, the problem of what goods to produced is solved primarily by
A
directives of the government
B
the pattern of consumers spending
C
producers of consumer goods
D
people producing what they want
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Correct Option: B
Consumer preferences and resource scarcity determine which goods are produced and in what quantity; the prices in a market economy act as signals to producers and consumers who use these price signals to help make decisions. Governments play a minor role in the direction of economic activity.
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