The use of prices and sales to signal desired output in an economy is called the government directive. market mechanism. public good. private good.

The use of prices and sales to signal desired output in an economy is called the **market mechanism**. Here's a brief explanation of the terms for clarity: - **Government directive**: This refers to regulations or commands issued by the government to control economic activities. - **Market mechanism**: This is the process by which prices and sales determine the allocation of resources in a free market economy. - **Public good**: These are goods that are non-excludable and non-rivalrous, meaning they are available for everyone to use without depleting their availability. - **Private good**: These are goods that are both excludable and rivalrous, meaning they can be owned and consumed by individuals. In summary, the correct answer is **market mechanism**.