The 'Invisible Hand' Refers to the Notion That

question 45

Multiple Choice

The 'invisible hand' refers to the notion that

• A) marginal benefit decreases as more is consumed.
• B) no matter what allocation method is used, the resulting production is efficient.
• C) competitive markets send resources to their highest-valued uses.
• D) marginal cost increases as more is produced.
• E) government intervention is necessary to ensure efficiency.

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Definitions:

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment activities, and financing activities.

Operating Activities

Activities that are directly related to the primary business operations, such as selling goods and services.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, reflected in a company's cash flow statement.

Financing Activities

Actions that result in changes in the size and composition of the equity capital or borrowings of a company, as reported in the cash flow statement.