1 Answer | Add Yours
Economists say that every economy must answer three basic and fundamental questions. (The Drexel.edu link below has 4. Textbooks I've taught from have 3. The second and third questions in the Drexel link are lumped together in the second question in this answer.) The questions are
- What to produce. The economy must decide what goods and services it will produce.
- How to produce. It must decide whether it will use machines or manual labor. It must decide if it will produce using slavery or paid labor. If it pays workers, it must decide if there will be a minimum wage. All of these, and millions more, are questions that must be answered by every economy.
- For whom to produce. Who will get the goods and services produced? How will it all be distributed.
These are questions that always remain the same. Different countries come up with different ways of answering them, but the questions remain the same.
We’ve answered 317,785 questions. We can answer yours, too.Ask a question