Under competitive conditions, market prices
a. generally convey little information about the value and cost of goods.
b. do not usually have much of an effect on the decisions of individuals.
c. are incapable of coordinating the actions of buyers and sellers.
d. generally bring the self-interest of individuals into harmony with the general welfare.
D
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Which of the following statements is true of the federal funds market?
A) No banks are refused loans in the federal funds market. B) Although the federal funds market aims to provide liquidity to needy banks, it is not very popular as overnight loans are logistically inefficient for large banks. C) In the federal funds market, banks with a shortage of reserves borrow funds, while banks with an excess of reserves lends them out. D) The interbank lending system works more efficiently in periods of financial panic than in periods of financial stability.
Which of the following is NOT a consumption good?
A) a U.S. government bond B) a UPS truck C) Nike swimming trunks D) a Subway sandwich E) marriage counseling services
When the money supply decreases, other things being equal,
a. real interest rates fall and investment spending rises. b. real interest rates fall and investment spending falls. c. real interest rates rise and investment spending falls. d. real interest rates rise and investment spending rises.
The demand for money that arises so that individuals or firms can make purchases on quick notice is called the:
A. real demand for money. B. transaction demand for money. C. liquidity demand for money. D. speculative demand for money.