Answer:
The best definition of an economic system is **process by which people choose how to use limited resources in order to meet their needs**. This definition captures the essence of what an economic system is all about: how do we allocate scarce resources in a way that meets the needs of the people?
The other two options are not as accurate. Option 2, "government makes the best decisions," is too simplistic. In reality, there are many different ways to make economic decisions, and the government is just one of them. Option 3, "economy based on traditional production methods," is also too narrow. There are many different types of economic systems, and not all of them are based on traditional production methods.
Here are some examples of different economic systems:
* **Market economy:** In a market economy, individuals and businesses make economic decisions based on supply and demand. The government plays a limited role in the economy.
* **Command economy:** In a command economy, the government makes all economic decisions. Individuals and businesses have little or no say in how resources are allocated.
* **Mixed economy:** A mixed economy is a combination of a market economy and a command economy. The government plays a role in the economy, but individuals and businesses also have some freedom to make economic decisions.
The best economic system for a particular country depends on a variety of factors, including the country's history, culture, and level of development. There is no one-size-fits-all answer.
Step-by-step explanation: