McConnell_Brue_Chapter02

The market process allows communication in the market

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Unformatted text preview: llows communication in the market place to cue producers and consumers to behave in their respective ways. Secondarily, their behaviors communicate how resources are to be allocated in the future and this feedback loop creates a perennial stimulus for change. • The very core of the market process is comprised of the private ownership of resources. We are free to use these resources any way we see fit so long as we are prepared to live with the consequences of our choices. • In the event that we make poor resource use choices, the market will punish us because of our inefficiency. Alternatively in the event that we make efficient choices with regard to the use of our resources, we are rewarded in the market. • Finally, the freedom of information exchange transmits signals to everyone so that we may continue to make increasingly more efficient production and consumption decisions over time. 4 Chapter 2: The Market System and The Circular Flow Slide 10 Does the United States have a pure market economy? No. Pure marke...
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This note was uploaded on 09/10/2009 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.

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