Author Question: In 2009, household spending was the smallest component of total spending in the U.S. economy. a. ... (Read 106 times)

jlmhmf · **on:** Jun 30, 2018

In 2009, household spending was the smallest component of total spending in the U.S. economy.
a. True
b. False
Indicate whether the statement is true or false

Question 2

It can be said that, ultimately, consumers are the driving force behind answers to the three basic economic questions faced by societies. Explain the consumer's role in providing these answers.

Swizqar · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

False

Answer to Question 2

What will be produced is directly determined by businesses. However, firms are aware that the way to succeed is to offer products that consumers find desirable. What businesses produce is determined by what they believe consumers want. How goods are produced is determined by firms that seek to reduce the costs of production. Since consumers are price conscious, they will buy lower-priced products (ceteris paribus). The consumers who have earned sufficient wealth and are willing to spend their wealth on these products are the individuals who will ultimately receive these products.