--%>

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 : If households If households become more

    If households become more willing to hold less cash and more stocks or bonds, the

  • Q : Public debt How does an internally held

    How does an internally held public debt differ from an externally held public debt?

  • Q : Positional Goods problem Can someone

    Can someone help me in finding out the right answer from the given options. In accord with the theories of Thorstein Veblen, the positional goods from which the owner or user of the good derives the jollies mainly since of the power, class and status signaled by the p

  • Q : Closed economy Hello. I need help with

    Hello. I need help with my assignment, I was sick and lost alot of time.My submission deadline is tomorrow i need your help i have attached the questions Thanks in advance

  • Q : Definition of equilibrium price

    Definition of equilibrium price: It is the price which balances quantity demanded and quantity supplied. The equilibrium price is frequently termed as the "market-clearing" price since both buyers and sellers are p

  • Q : Self consumption-Value of output

    Illustrate whether output generated for self consumption is comprised or not comprised in the value of output? Answer: The output generated for self consumption is

  • Q : Problem onto marginal tax rates A

    A prosperous person who made higher and higher incomes yearly would possibly benefit most from: (w) proportional tax system. (x) progressive tax system, much like the one in place today. (y) regressive tax system. (z) fixed percentage tax system.

    Q : Surplus of the good Describe when there

    Describe when there will be a surplus of the good?

  • Q : About macroeconomics Do you think that

    Do you think that macroeconomic policy should be designed to achieve a measured unemployment rate of zero? Why or why not should this be the case?

  • Q : Microeconomics is studying economic

    is studying economic worth your time and effort