Which term describes the system used to manage limited resources for the production, distribution, and consumption of goods and services?

• A. Economics
• B. Positive economics
• C. Economy
• D. Normative economics

Answer: (C)

The system used to manage limited resources for producing, distributing, and consuming goods and services is the economy. The economy encompasses the actual institutions, markets, firms, households, and government that coordinate how resources are allocated and how goods and services flow through an area. Economics, in contrast, is the study of how this system works and how people make choices within it. Positive economics analyzes facts about the economy, while normative economics involves judgments about what should be done. So the term that describes the system itself is economy.