Unit 1 1 How does capitalism answer what question? => In capitalism, the what question is answered by consumers as they spend their dollars for the good and services that they most desire 2 How does socialism answer how question? => Central planners also answer the how question in socialist economies They determine how to combine society’s inputs in order to produce the output desired 3 What is free market economy? => Free market economy is an economic system in which the market is supposed to b.