In a market economy, who makes the decisions?
Understand the Problem
The question is asking about the decision-making process in a market economy, particularly who takes on the role of making those decisions within that economic framework.
Answer
households and firms
The final answer is households and firms.
Answer for screen readers
The final answer is households and firms.
More Information
In a market economy, the decisions about what to produce, how to produce, and for whom to produce are made by the interaction of households and firms in the marketplace.
Tips
A common mistake is assuming that either only firms or only households make the decisions, but it is the interaction of both.
Sources
- In a market economy, who makes the decisions that guide most economic activity? - homework.study.com
- Market Economy - Annenberg Classroom - annenbergclassroom.org
- Market economy - Wikipedia - en.wikipedia.org
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