In the Canadian economy, most decisions regarding resource allocation are made by
A)the various levels of government.
B)consumers and producers interacting in the price system.
C)legal contract.
D)business firms only.
E)negotiation between unions and firms.

Question

Quizplus · Accepted Answer

In a market economy such as Canada, decisions regarding resource allocation are primarily made by consumers and producers interacting in the price system. The forces of supply and demand determine the prices of goods and services, which in turn guide producers in deciding what to produce and how much to produce, and guide consumers in deciding what to buy and how much to spend. While government may play a role in regulating certain aspects of the economy, the majority of resource allocation decisions are made through market interactions.

In the Canadian Economy, Most Decisions Regarding Resource Allocation Are