In a market economy, economic activity is guided by
A) the government.
B) corporations.
C) central planners.
D) self-interest and prices.

Question

Quizplus · Accepted Answer

In a market economy, self-interest and prices guide economic activity. Consumers and producers make their own decisions about what goods and services to produce and consume based on their own self-interest, and prices act as signals that direct those decisions. The government may play a role in regulating the market and providing some services, but it does not dictate economic activity. Corporations and central planners may have some influence, but ultimately it is the interactions between buyers and sellers that drive the market economy.

In a Market Economy, Economic Activity Is Guided by