What to produce in a market economy is ultimately determined by the:
A)output decisions of business firms.
B)government.
C)spending decisions of households.
D)workers' technical skills.

Question

Quizplus · Accepted Answer

In a market economy, what to produce is ultimately determined by the spending decisions of households. Businesses produce goods and services that they believe households will want to buy in order to make a profit. The government may play a regulatory role, but it does not determine what goods and services are produced. Workers' technical skills may also influence production, but ultimately it is demand from households that determines what is produced.

What to Produce in a Market Economy Is Ultimately Determined