"For whom is a given mix of goods and services to be produced? How, in other words, are the society's outputs to be distributed among its members?" In a market economy, this question is resolved primarily in the:
A) Public sector through the mechanism of central planning
B) Business sector through the mechanism of advertising
C) Private sector through the earning and spending of income
D) Money market through borrowing and saving by households and businesses

Question

Quizplus · Accepted Answer

In a market economy, the distribution of goods and services is primarily determined by the private sector through the earning and spending of income. Individuals and businesses make choices on what to produce and consume based on their own self-interest and ability to pay. Government intervention may occur through taxation and regulation, but ultimately the market forces of supply and demand drive the distribution of goods and services. The other options listed (central planning, advertising, money market) are not the primary mechanisms for determining the distribution of outputs in a market economy.

"For Whom Is a Given Mix of Goods and Services