How are the fundamental economic questions answered in a market economy?
A) The government alone decides the answers.
B) Individuals, firms, and the government interact in markets to decide the answers to these questions.
C) Households and firms interact in markets to decide the answers to these questions.
D) Large corporations alone decide the answers.
Answer: C
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A formalwear shop will earn a net income of $1,500 per year on a tuxedo. A tuxedo is good for two years, after which it will be worn out and worthless. If the interest rate is 10 percent (0.10) per year, what is the present value of a new tuxedo to the shop? (Assume that each year's income is received at the end of the year.)
a. $148.76 b. $2,955.30 c. $2,955.59 d. $2.603.31 e. $3,000.00
To encourage economic development a country should do all of the following except
What will be an ideal response?
The 1969 IBM case ended when
A. IBM won an injunction against Apple's production of PCs. B. the U.S. Justice Department dropped the case in 1982. C. mainframe computers gradually replaced PCs in economic importance. D. Apple and Microsoft dropped their complaints against IBM.
An increase in the interest rate tends to increase the demand for loanable funds
a. True b. False