Question

The central problem of the economy arise due to problem of ___________.

• A. scarcity of resources
• B. allocation of factors of production
• C. consumption of finished goods
• D. money supply

Answer 1

The correct option is A scarcity of resources

The central problem of every economy arises due to scarce resources which refers to the resources that are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs.