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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
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.
- Spring '09