For whom is a given mix of goods and services to be produced? How, in other words, is the product to be distributed among people when such commodities and services are available? In a market economy, this problem is resolved primarily in the:
A)public sector through the mechanism of central planning.
B)business sector through the mechanism of advertising.
C)private sector through the earning and spending of income.
D)money market through borrowing and saving by households and businesses.

Question

Quizplus · Accepted Answer

In a market economy, the product is distributed among people through the private sector, which involves the earning and spending of income by individuals and businesses. Therefore, choice C is the correct answer. Option A is incorrect because central planning is a characteristic of a command economy. Option B is incorrect because advertising is a mechanism used by businesses to promote their products, but it is not a way to distribute goods and services. Option D is incorrect because the money market is a financial market where borrowing and saving take place, but it is not the primary way to distribute goods and services.

For Whom Is a Given Mix of Goods and Services