Which of the following best defines an economy?

• A. A collection of laws governing trade between countries
• B. A method for calculating national income
• C. A government organization that regulates financial markets
• D. A system in which people and businesses produce, distribute, and consume goods and services

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of an economy. An economy refers to the overall system that involves the production, distribution, and consumption of goods and services within a society or geographic area.
2. Step 2: Analyze each option given in the problem to see if it matches the definition of an economy.
3. Step 3: Recognize that 'A collection of laws governing trade between countries' describes trade regulations or international trade policy, not the economy itself.
4. Step 4: Note that 'A method for calculating national income' refers to an economic measurement tool, not the economy as a whole.
5. Step 5: Understand that 'A government organization that regulates financial markets' describes a regulatory body, which is part of the economic system but not the economy itself. Therefore, the best definition is 'A system in which people and businesses produce, distribute, and consume goods and services.'