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JAMB Economics 2014 Question 3

Question 3

Economic Systems

In capitalist economies, questions about what to produce are ultimately answered by

  1. A.output decisions of firms.
  2. B.spending decisions of households.
  3. C.income level of households.
  4. D.available technical skills in the economy.
Show the answer and explanation

Answer: B (spending decisions of households.)

Explanation

Under capitalism firms produce what sells. Households' spending ('voting' with naira) tells firms what to produce.