The Market System's Answer to the Fundamental Question "How Will

question 112

Multiple Choice

The market system's answer to the fundamental question "How will the goods and services be produced?" is essentially

• A) "With as much machinery as possible."
• B) "Using the latest technology."
• C) "By exploiting labor."
• D) "In ways that minimize the cost per unit of output."

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in a given year in constant prices.

Percentage Change

A mathematical calculation that shows how much something changes in value as a proportion of its initial value.

International Trade

The exchange of goods and services between countries, allowing for specialization and economies of scale.

Specialization

In economics, it refers to the process by which individuals, businesses, or countries focus on producing a narrow range of goods or services to gain greater efficiencies and improve competitive advantage.