A key distinction between market-based economic systems and other types is
A) the use of democratic political systems to determine the goods produced, methods of production, and allocations of goods
B) the use of corporations as a key mechanism for production of goods
C). the use of public rather than private decisions to determine the goods produced, methods of production, and allocations of goods
D) the reliance on voluntary decisions and exchanges versus forced exchanges
Answer: D) the reliance on voluntary decisions and exchanges versus forced exchanges
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A person's consumption possibilities is defined by the budget line because
A) it marks the boundary between what is affordable and unaffordable. B) it represents the individual's preference for different combinations of goods. C) it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources. D) all consumers must consume on their budget line.
For economists, the word "utility" means:
A. versatility and flexibility. B. rationality. C. pleasure or satisfaction. D. purposefulness.
If the bank advertises 6 percent annual interest rate on a one-year certificate of deposit and you anticipate the rate of inflation to rise to 3 percent during the year, then the real rate of interest on the certificate of deposit is
A) 9 percent. B) 6 percent. C) 3 percent. D) 2 percent.
Education is an example of a positive externality.
Answer the following statement true (T) or false (F)