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What three functions does the price mechanism perform?
A
Price mechanism measures national income, guarantees equal incomes and eliminates scarcity without government intervention.
B
Price mechanism signals what to produce, incentivises supply and rations scarce resources without central direction.
C
Price mechanism signals what to consume, taxes production and provides unlimited resources through consumer choice.
D
Price mechanism fixes what to produce, discourages supply and distributes scarce resources according to government targets.
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1.4.2 resource allocation in these economic systems Flashcards
21 flashcards on CIE Intl A Level Economics 1.4.2 resource allocation in these economic systems: the key terms and definitions you need to recall.