From society's point of view, the economic function of profits and losses is to
A)promote the equal distribution of real assets and wealth.
B)achieve full employment and price level stability.
C)contribute to a more equal distribution of income.
D)reallocate resources from less-desired to more-desired uses.

Question

Quizplus · Accepted Answer

Profits and losses serve as signals in a market economy, guiding resources towards industries or areas where they are most valued by consumers (indicated by profits) and away from areas where they are less valued (indicated by losses). This mechanism helps in the efficient allocation of resources, ensuring they are used where they generate the most value.

From Society's Point of View, the Economic Function of Profits