In a market economy, society relies on the self-interest of individuals to determine what, how, and for whom to produce.
Answer the following statement true (T) or false (F)
True
In a market economy, individuals decide how, what, and for whom to produce based on self-interest.
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Isabel receives a check for $7,000 from Kermit and deposits it in her bank. Suppose that the reserve ratio is 10 percent. As a result of this transaction the money supply will
A) decrease by $63,000 and then increase by $70,000. B) increase by $70,000. C) decrease by $70,000 and then increase by $63,000. D) not change.
Funds held in ________ are subject to reserve requirements
A) all checkable deposits B) all checkable and time deposits C) all checkable, time, and money market fund deposits D) all time deposits
one of the four main categories of spending identified by John Maynard Keynes is government purchases
a. true b. false
A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
A. shut down in the short run. B. produce because the resulting loss is less than its TFC. C. produce because it will realize an economic profit. D. liquidate its assets and go out of business.