The Term Market Failure Refers to

question 214

Multiple Choice

The term market failure refers to

• A)a situation in which the market on its own fails to allocate resources efficiently.
• B)an unsuccessful advertising campaign which reduces demand for a product.
• C)a situation in which competition among firms becomes ruthless.
• D)a firm that is forced out of business because of losses.

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Definitions:

Bank Account

An account managed by a bank where the monetary transactions between the bank and its customers are documented.

Annual Raises

Increases in salary or wage that are given to employees on a yearly basis, often based on performance or inflation adjustments.

First Deposit

The initial amount of money placed into a financial account or investment.

Inflation

The speed at which overall price levels for products and services increase, leading to a decrease in buying power.