ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Traditional economies rely on habit, custom, or ritual to decide what to produce, how to produce it, and to whom to distribute it. In a centrally planned economy the central government makes all decisions about the production and consumption of goods and services.
Detailed explanation-2: -Think about it – can a society satisfy each and every human wants? Certainly not. Therefore, it has to decide on who gets what share of the total output of goods and services produced. In other words, society decides on the distribution of the goods and services among the members of society.
Detailed explanation-3: -Human wants tend to be competitive. We have limited means and so we cannot satisfy all of our wants.
Detailed explanation-4: -Each society must decide what to produce in order to satisfy the needs and wants of its people. Because resources are limited, each decision that a society makes about what to produce comes at an opportunity cost.