What are the basic problems of the economy?

Answer 1

The basic problems arise when an economy is facing recession. If one economy goes into crisis, the other economy will also suffer from problems. U.S. Imports many of the products from India. If a crisis occurs in U.S., Indian exports will see a decline if US decides to cut back its imports to decrease its negative account balance.

The 3 basic problems are:-

1.) What to produce?

2.) How to produce?

3.) For whom to produce?

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Answer 2

Most people have to work for an employer in order to survive. Production takes place for profit, hence poor-quality goods are often produced. There is widespread poverty, which is caused by the capitalist system, not by genuine shortages.