How are the fundamental economic questions answered in a market economy?
A)The government alone decides the answers.
B)Individuals, firms, and the government interact in markets to decide the answers to these questions.
C)Households and firms interact in markets to decide the answers to these questions.
D)Large corporations alone decide the answers.

Question

Quizplus · Accepted Answer

In a market economy, households and firms interact in markets to determine the allocation of resources and answer the fundamental economic questions through supply and demand dynamics.

How Are the Fundamental Economic Questions Answered in a Market