When Prices Are Determined in a Free-Market System

question 41

Multiple Choice

When prices are determined in a free-market system

• A)changes in the economy can be foreseen by officials.
• B)resources are allocated without conscious central coordination.
• C)firms respond to changes in the economy mainly by altering the wage rate.
• D)demand shifts,caused by price changes,coordinate all necessary changes in the economy.
• E)supply shifts,caused by price changes,coordinate all necessary changes in the economy.

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Definitions:

Rank-and-File Employee

Workers who are not in managerial positions and usually perform the operational tasks within an organization.

Gainsharing Plans

Programs under which both employees and the organization share financial gains according to a predetermined formula that reflects improved productivity and profitability.

Organizational Resources

The assets, capabilities, processes, and information that a company uses to improve its effectiveness and achieve its objectives.

Executive Compensation

The package of pay, benefits, and incentives provided to an organization's senior management, designed to attract and retain key executives.