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Paper 1 · November 2010 · Economic Systems

In a capitalist society, the economic problem of 'what goods' shall be produced is solved primarily by

Apeople advertising their wants.
Bdirection by the government.
Cthe pattern of consumers' spending.
Dpeople producing directly to satisfy their own wants.

Explanation

In a capitalist/market economy, the pattern of consumer spending (effective demand) signals to producers what goods to produce.

ZIMSEC Economics Paper 1, November 2010, Q1

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