What is a market economy?
What will be an ideal response?
A market economy is an economy in which the decisions of households and firms interacting in markets allocate economic resources.
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A nominal wage is: a. always equal to the legal minimum wage
b. the same as the efficiency wage. c. measured in terms of the amount of goods and services it can purchase. d. measured in current dollars rather than in constant dollars. e. measured in constant dollars rather than in current dollars.
Which of these is true of the expected price level in a labor market? a. It is the equilibrium price level in the short run
b. It determines the actual price level in the short run. c. It determines the actual price level in the long run. d. It allows firms and resource owners to make long-term wage agreements. e. The difference between the expected and actual price levels is equal to the actual inflation rate.