In a market economy, the decision regarding allocation of resources is made by
A. the operation of the forces of supply and demand.
B. policy authorities in Washington, D.C.
C. budget planners in state capitals.
D. committees from a variety of economic interest groups.
E. All of the responses are correct.
Answer: A
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A recent survey by India's central bank reported that spending plans by firms on large new projects fell by 46 percent in the year ending March 2012, compared with the prior year. This decrease will most directly impact
A) physical capital growth. B) human capital growth. C) technological change. D) population growth.
A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is
A) less than $100. B) between $100 and $200. C) between $200 and $300. D) more than $300.
If the nominal money supply grows 6%, real income rises 2%, and the inflation rate is 5%, then the income elasticity of money demand is
A) 0.5. B) 0.75. C) 1.0. D) 1.5.
The greater the economic freedom in a country, the higher is the index of human development
a. True b. False Indicate whether the statement is true or false