In a market economy, the decision regarding allocation of resources is made by
a. automatic forces of supply and demand.
b. authorities in Washington, D.C.
c. planners in state capitals.
d. committees from a variety of economic interest groups.
e. All of the above are correct.
a
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In the coordination failure model, the "good" equilibrium is characterized by a
A) higher real interest rate and a higher price level than the "bad" equilibrium. B) higher real interest rate and a lower price level than the "bad" equilibrium. C) lower real interest rate and a higher price level than the "bad" equilibrium. D) lower real interest rate and a lower price level than the "bad" equilibrium.
The consumption function shows the relationship between:
a. planned consumption expenditures and disposable income. b. permanent income and savings. c. business inventory and real GDP. d. aggregate demand and aggregate consumption.