--%>
Assignment Help - homework help

Signals that guide economic decisions

In market economies, what are the signals which guide economic decisions?

E

Expert

Verified

In market economies, prices are the signals which guide economic decisions and thus allocate scarce resources. For each and every good in the economy, the price makes sure that supply and demand are in balance. The equilibrium price then finds out how much of the good buyers chooses to buy and how much sellers select to produce.

   Related Questions in Macroeconomics

  • Q : FX Rates & The Balance of Payments The

    The Financial Account captures international fund flows due to

    		•
  • Q : Plan and non-plan expenditure Write a

    Write a brief note on plan and non-plan expenditure of the government with illustration. Answer: Plan Expenditure

    		•
  • Q : Problem on slope of demand curve The

    The demand curve for DVD games is a straight line, therefore its slope: (1) Is constant, although price elasticity of demand drops/falls as output increases. (2) Price elasticity are both stable. (3) Is constant, although price elasticity of demand increases as the pr

    		•
  • Q : Describe open market operations

    Describe open market operations? What is its consequence on availability of credit? Answer: Open market operations signify the purchase and sale of government secur

    		•
  • Q : National income how to calculate

    how to calculate national income under value added method

    		•
  • Q : Borrowings and recovery of loans

    Categorize the borrowings and recovery of loans into capital and revenue receipts of government budget. Give reason too.

    		•
  • Q : Stage of the business cycle What stage

    What stage of the business cycle is our economy experiencing at present time? proof your answer.

    		•
  • Q : Problem related to rising GDP Between

    Between 1961 and 2007, the rising share of the Canadian population in paid employment contributed to rising GDP per person. But suppose that the share of the Canadian population in paid employment had remained constant between 1961 and 2007. What would Canadian GDP pe

    		•
  • Q : Define Macro Economics Macro Economics

    Macro Economics: Macro economics studies the economy as an entire.

    		•
  • Q : Problem on perfect replacements Imports

    Imports and American cars are much close however not perfect replacements. When the U.S. govt. tried to enhance American car sales by setting a price ceiling of P1 on imported cars: (i) The quantity of cars imported will drop/fall from Q0 to Q1. (ii)

    		•