The word Economics is derived from the ancient Greek word oikonomia. The father of Economics has defined it as “an inquiry into the nature and causes of the wealth of nations.”Economics has two main branches - Microeconomics and macroeconomics. Where microeconomics deals with how the household and firms in different kinds of markets allocate resources to produce and consume goods, macroeconomics deals with the economy as a whole. It deals with various factors like national output, GDP, income, employment, interest rate, etc. Many economists have given their theories and viewpoints on how to deal with various economic problems. Both the branches are interdependent and complement each other.

Which of the following is a central problem of an economy?

All of above

The correct answer is option 4: All of above

The three central problems of an economy are what to produce and in what quantities, how to produce (capital intensive or labour intensive techniques) and for whom to produce.