All of the following are assumptions of both market and public-sector decision making EXCEPT
A. Decisions are motivated by individuals' self-interest.
B. Opportunity costs exist in decisions.
C. Decisions are based on majority rule.
D. Choices reflect incentives faced by decision makers.
Answer: C
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Equity holders are a corporation's ________. That means the corporation must pay all of its debt holders before it pays its equity holders
A) debtors B) brokers C) residual claimants D) underwriters
Refer to the above diagram. The economy is at equilibrium at point A. What fiscal policy would be most appropriate to control demand-pull inflation?
A. Decrease aggregate demand by increasing taxes. B. Increase aggregate demand by increasing government spending. C. Increase aggregate demand by decreasing taxes. D. Decrease aggregate supply by increasing taxes.