Which of the following statements best reflects the perspective of economics regarding individual wealth and poverty?

• A. Economic outcomes are primarily determined by the decisions and actions of individuals, not solely by those in power.
• B. People in power are the only factor that determines whether individuals become wealthy or poor.
• C. Economics teaches that government policies always guarantee individual wealth.
• D. Wealth and poverty are entirely random and cannot be influenced by any decisions.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the core perspective of economics regarding individual wealth and poverty. Economics studies how individuals and groups make choices to allocate scarce resources, which affects their economic outcomes.
2. Step 2: Recognize that economics emphasizes the role of individual decisions and actions, such as work effort, saving, investing, and entrepreneurship, in determining wealth and poverty.
3. Step 3: Evaluate the given statements by comparing them to economic principles: economics does not claim that only people in power determine wealth, nor that government policies always guarantee wealth, nor that wealth is entirely random.
4. Step 4: Identify that the statement 'Economic outcomes are primarily determined by the decisions and actions of individuals, not solely by those in power' aligns best with economic reasoning, as it highlights individual agency within economic systems.
5. Step 5: Conclude that economics views wealth and poverty as outcomes influenced by individual choices and actions, within the context of broader social and institutional factors, rather than being solely dictated by power, guaranteed by policy, or purely random.