--%>

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 : Price elasticity of demand for DVD games

    In this figure shown below, the price elasticity of demand for DVD games among prices of $30 and $40 is nearest to: (i) 7/6. (ii) 1/2. (iii) 3/7. (iv) 7/3. (v) 1/3.

    Q : Why value of MPC is not greater than one

    Why the value of MPC is not greater than 1? Answer: This is because change in consumption can never be more than change in income.

  • Q : Supply factors in economic growth

    Briefly explain the four supply factors in economic growth?

  • Q : Econ question No need apa format no

    No need apa format no need introduction and conclusion Only answer question being ask, thanks

  • Q : IMF? In saying that the present system

    In saying that the present system of floating exchange rates is managed we mean that: IMF officials determine exchange rates on a day-to-day basis. countries that allow their exchange rate to move freely will lose their borrowing privileges with the IMF. the value of any IMF member's currency

  • Q : Market imperfection associated with

    Question: This assignment in Economics, deals with macro-economics. An essay on Market imperfection associated with negative externalities. According to Economics, perfect markets would require an "invisible hand" to allocate all the resources to be a

  • Q : Define involuntary unemployment

    Involuntary unemployment: Involuntary unemployment terms to a condition in which people that are willing to work are unable to obtain work.

  • Q : Illustration of equal marginal advantage

    Can someone please help me in finding out the accurate answer from the following question. Shoppers who shift among checkout lanes until it emerges that all register lines are probable to be equally time-consuming are trying to verify to the law of: (i) Equivalent mar

  • 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 : Analyzing number of event that

    How can we analyze the number of event that influences the market?