What is produced and consumed in the economy is determined jointly by
A)the behaviour of business managers and government policies.
B)the preferences of consumers and the behaviour of business managers.
C)the economy's productive capacity and the preferences of consumers.
D)standards of living and business cycles.
E)government policies and the economy's productive capacity.

Question

Quizplus · Accepted Answer

The economy's productive capacity determines what can be produced, and the preferences of consumers influence what is demanded. The two work together to determine what is produced and consumed in the economy. While government policies and business behavior can have an impact, they are secondary to the fundamental forces of productive capacity and consumer preferences.

What Is Produced and Consumed in the Economy Is Determined