In a capitalist system, the decisions and actions of millions of consumers and firms are highly coordinated by:
A) The state and government
B) Markets and prices
C) A central planning agency
D) An international organization

Question

Quizplus · Accepted Answer

In a capitalist system, markets and prices are the key mechanisms that coordinate the decisions and actions of consumers and firms. Prices provide information about the relative scarcity of goods and services, and signals to producers what goods and services consumers are demanding. This creates incentives for businesses to efficiently allocate resources to produce products that consumers demand, resulting in a highly coordinated economic system. The state and government may play a role in regulating markets, but they generally do not actively coordinate the economy in a capitalist system. A central planning agency or international organization would be antithetical to the principles of a capitalist system.

In a Capitalist System, the Decisions and Actions of Millions