Final answer:
The study of finance addresses three basic economic questions: what should be produced, how it should be produced, and for whom it should be produced. These questions guide societies in optimally allocating their resources.
Step-by-step explanation:
Basic Questions in Finance
The study of finance addresses three basic questions, which every society must answer to meet its people's needs. These questions are:
- What should we produce? - This addresses the decision regarding which goods and services should be produced based on needs, wants, and resource availability.
- How should we produce it? - This question deals with the choice of production methods, which can be influenced by factors like technology, efficiency, and cost.
- For whom should we produce it? - The final question determines the allocation of produced goods and services, deciding who gets them based on various economic systems and policies.
Addressing these questions helps societies optimize their resources and satisfy the preferences of their populations.