Question 15
Economic SystemsThe price mechanism is more effective in achieving efficient performance of the economy than the planning mechanism because of the
- A.role of supply and demand
- B.role of material incentive
- C.existence of buyers and sellers
- D.role of money
Show the answer and explanation
Answer: A (role of supply and demand)
Explanation
Prices formed by demand and supply automatically signal what people want and direct resources there, without the delays of planning.