Use the following two statements to answer this question. (I) In a market system, resource prices both provide incentives for the efficient allocation of resources and determine income distribution.
(II) Income and wealth are neither created nor destroyed, they are just fixed-sized pies to be allocated among individuals.

Question

Quizplus · Accepted Answer

Statement (I) is true as resource prices do provide incentives for efficient allocation of resources and also determine income distribution. However, statement (II) is false as income and wealth can be created or destroyed through various economic activities and policies. Therefore, only option C is correct.

Use the Following Two Statements to Answer This Question