Which of the following is a benefit of using an indirect strategy in economics?

• A. It reduces the role of markets in resource allocation.
• B. It guarantees equal distribution of goods.
• C. It allows for specialization and increased efficiency.
• D. It eliminates the need for opportunity cost.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand what an indirect strategy in economics refers to. Typically, this means using markets and trade rather than direct allocation or self-sufficiency to distribute resources and goods.
2. Step 2: Recognize that indirect strategies often involve specialization, where individuals or firms focus on producing specific goods or services rather than everything they need themselves.
3. Step 3: Recall the concept of comparative advantage, which explains how specialization leads to increased efficiency because parties produce what they are relatively better at.
4. Step 4: Analyze the options given: reducing market roles contradicts the idea of indirect strategies relying on markets; guaranteeing equal distribution is not ensured by indirect strategies; eliminating opportunity cost is incorrect because opportunity cost always exists.
5. Step 5: Conclude that the main benefit of an indirect strategy is that it allows for specialization and increased efficiency, which improves overall economic outcomes.