distributed. By goods and services, economists mean everything that can be bought and sold. By produced, they mean the processing and making of goods and services. By distributed, they mean the way in which goods and services are divided among people.

2/-ECONOMIC PROBLEMS

Every nation must organize the production and distribution of goods and services wanted by its citizens. To do this, a nation's economic system must solve four basic problems: (1) What shall be produced? (2) How shall goods and services be produced? (3) Who shall get the goods and services? and (4) How fast shall the economy grow?

What shall be produced? No nation can produce enough goods and services to satisfy all its people. But which goods and services are most important? Should land be used to rear animals or grow wheat? Should factories be used to produce tractors, or television sets?

How shall goods and services be produced? Should each family grow its own food and make its own clothing? Or should special industries be developed to provide these products? Should many workers be used in an industry? Or should more machines be used instead?

Who shall get the goods and services? Should everyone have an equal share of goods and services? Which goods and services should go only to people who can afford to buy them? Which goods and services should be distributed in some other way?

How fast shall the economy grow? An economy grows when it produces more goods and services. A nation must decide what