Which of the following questions are answered by the government in a socialist economy?
Answer & explanation
Correct answer: option 1
Every society has to answer three questions:
- What to produce
- How to produce
- For whom to produce
If the government answers the questions, it is referred as socialist economy. If the market forces of demand and supply answers the question, it is known as capitalistic economy. And a blend of both the systems is known as a mixed market structure.