Question

What questions must an economic system answer?  What criteria do we use to evaluate an economic system?  List the main characteristics of a market system.

Answer 1

Answer -

There are three important questions which must answerd by an economic system -

1. What to produce - What goods and services should be produced?
2. ​​​​​​How to produce - wich methods and techniques should be used in the process of production
3. For whom to produce - for which class and society should be produced.

Criteria which should be use to evaluate an economic system -

Measuring the size of the economy of a country involves several key factors, but measuring its Gross Domestic Product ( GDP), which measures the market value of products and services produced by a country, is the best way to measure its intensity.

Main characteristics of a market economy -

These characteristics of the market system are briefly explained:

1. Private property,
2. Freedom of business and choice,
3. The position of self-interest,
4. Competition,
5. Markets and prices,
6. Dependency on technology and capital goods,
7. Specialisation,
8. The use of money and the active,
9. And restricted, role of government.