"the fundamental economic problems of an economy is the problem of choice" discuss?
Answer:
The basic economic problem is a term used in economic theory. It asserts that there are limited resources for infinite human wants or scarcity. It involves what goods and services an economy should produce, for example should the emphasis be on public services, housing, agriculture or manufacturing. It also determines how the goods and services should be produced, capital or labour intensive and the efficiency.
There are four reasons why wants and needs are virtually unlimited:
Goods eventually wear out and need to be replaced.
New or improved products become available.
People get fed up with what they already own.
With an increase in salary the expectations of the consumer rise.
I got that from wikipedia.
So this would involve opportunity cost--there is a resource and a number of competing uses for it. So if you were to accomplish something with that resource you would be sacrificing what could be gained by accomplishing another task. So that involves choice.
I don't think choice is the fundamental though. What lies at the very base of economic difficulty is just the scarcity of resources. (However, maybe this doesn't count if you would just like to work within the parameters of the real world. The scarcity of resources cannot be changed.)
Alright, I'm not an economics student, but I hope that made sense--was all that what you were asking for?
I hope you found that useful. Maybe you should try your textbook.
In a recent report, Deutsche Bank economists pointed out the fundamental factor that is driving this process - the changing demographics. In India, the share of the working age population (people in the age group of 15-64) in the total population is expected to increase until 2035. The working age population saves its income to a much larger extent than the dependent population (young and old). Thus, as the share of working age population as a part of the total rises, the overall rate of saving in the economy rises sharply.
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