The "Informal Defence" of Free Markets Includes the Argument That

question 21

Multiple Choice

The "informal defence" of free markets includes the argument that competitive markets
1) lead to allocative efficiency;
2) provide automatic coordination of the actions of decentralized decision makers;
3) provide a stimulus to innovation and economic growth because of the pursuit of profits.

• A)1 only
• B)2 only
• C)3 only
• D)1 and 2
• E)2 and 3

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them ownership interest.

Limited Risk

Exposure to a relatively small possibility of loss or less severe consequences in an investment or business activity.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.

Supplies

Items used in the operation of a business or part of inventory not yet sold.