What Is NOT a Characteristic of Markets

question 21

Multiple Choice

What is NOT a characteristic of markets?

• A) Firms decide whom to hire and what to produce.
• B) Government policies do not affect the decisions of firms and households.
• C) Households decide which firms to work for and what to buy with their incomes.
• D) Firms and households guide the decisions based on profit and self-interest.

---

Definitions:

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Earnings Rate

The rate at which an individual or corporation is taxed or the speed at which an investment grows.

Present Value Index

A ratio used in capital budgeting to evaluate the profitability of investments by comparing the present value of future cash flows to the initial investment cost.

Compound Interest

Interest that is computed on both the initial amount of the deposit or loan and on the interest that has been added to that principal over past periods.