This is because in a capitalist economy (or market economy), the amount of goods produced depend on the demand and the supply for that good in the market while price acts as an incentive and a signal. This means that all goods are provided such that at that particular price, all demands that people have for that good is satisfied.
What to produce, how to produce it, and for whom to produce it
The government transfers money to the poor.
Keynes' main focus was toward Aggregate Demand. His belief was that an increase or decrease in spending would solve any problem.
Solve the economic problem of overproduction
how does the market mechanism solve the basic problem of free market economy?
Price mechanism is an effective way to solve the basic economic problem. The price of a product is what will determine the demand and this will influence the production output which directly affects the economy.
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By doing away with the economy and having a system based on production for use, with free access and no money or prices.
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The government transfers money to the poor.
Keynes' main focus was toward Aggregate Demand. His belief was that an increase or decrease in spending would solve any problem.
You might be able to solve a problem with a notebook that has an unstable system or a motherboard component by?
Solve the economic problem of overproduction
Apparantly by spending buttloads of money that we don't have.
I don`t know help me
how does the market mechanism solve the basic problem of free market economy?
it can be solve by if we can enhance to use more and more natural resources and decrease the chemical things which can pollute our enviroment
Price mechanism is an effective way to solve the basic economic problem. The price of a product is what will determine the demand and this will influence the production output which directly affects the economy.