ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economists address these three questions: (1) What goods and services should be produced to meet consumer needs? (2) How should they be produced, and who should produce them? (3) Who should receive goods and services? The answers to these questions depend on a country’s economic system.

Detailed explanation-2: -An economic system is any system of allocating scarce resources. Economic systems answer three basic questions: what will be produced, how will it be produced, and how will the output society produces be distributed?

Detailed explanation-3: -That is to produce goods for the poor or for the rich. Since the resources are scarce, the economy has to decide for whom it will produce goods. The goods are produced according to the paying capacity of the people. And this capacity depends on the income level of the people which is their purchasing power.

Detailed explanation-4: -An economic system is the method used by a society to produce and distribute goods and services. Traditional economies rely on habit, custom, or ritual to decide what to produce, how to produce it, and to whom to distribute it.

Detailed explanation-5: -What to produce? ➢ What should be produced in a world with limited resources? How to produce? ➢ What resources should be used? Who consumes what is produced? ➢ Who acquires the product?