A strength of the market economy is that:
A. it results in an equal distribution of wealth.
B. resources are used efficiently.
C. planners rather than consumers determine answers to the basic economic questions.
D. information for production and distribution decisions passes directly from the government to buyers.
Answer: B
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Venture capital funds invest in the equity of
A) start-up companies. B) IPOs. C) hedge funds. D) convertible debt.
If there is instability in the demand for commodities,
A) a monetary policy of fixed interest rates will perform better than a policy of holding the real money supply fixed. B) a countercyclical money-supply policy will cause large swings in interest rates. C) a fixed money supply policy will perform better than countercyclical changes in money supply. D) a fixed money supply policy will stabilize interest rates.
The federal government could stimulate investment spending by
a. phasing out the depreciation allowance on corporate income taxes. b. enacting an investment tax credit. c. reinstating the windfall profits tax. d. reducing the tax rate on capital gains. e. Both b and d are correct.
If the supply of bonds in the United States decreases, bond prices will rise. When bond prices rise interest rates will
A) fall, which will make U.S. financial assets more attractive to foreigners. B) rise, which will make U.S. financial assets more attractive to foreigners. C) fall, which will make U.S. financial assets less attractive to foreigners. D) rise, which will make U.S. financial assets less attractive to foreigners.