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Canada Economic System & Factors That Influence Growth — 13 Questions
Norwood, Kamyron

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Question 10.



How do market economies answer the three basic economic questions?

The past will guide producers in what goods to produce, how to produce them, and for which consumers to produce them. The past will guide all decisions.


The government will decide what goods to produce, how to produce them, and for which consumers to produce them. The government will make all decisions.


Supply and demand will guide producers in what goods to produce, how to produce them, and for which consumers to produce them. Supply and demand will guide all decisions.


Supply and demand will guide producers in what goods to produce, how to produce them, and for which consumers to produce them. The government will intervene to ensure fairness and productivity.



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Answer 1

Supply and demand will guide producers in what goods to produce, how to produce them, and for which consumers to produce them. Supply and demand will guide all decisions.

Explanation: In a market economy the price system (supply and demand) coordinates producers' and consumers' choices, determining what, how, and for whom to produce.