In a Market System, Self-Interest Is the Motivating Force That

question 237

Multiple Choice

In a market system, self-interest is the motivating force that

• A) makes individuals unwilling to deliver anything of value to others.
• B) makes owners of resources always want to use their resources themselves.
• C) leads the economy to chaos and confusion, especially the larger economies.
• D) coordinates and creates consistency in the operations of various parts of the economy.

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Definitions:

Discount on Bonds Payable

The difference between the par (or face) value of a bond and its lower issuing price, representing an additional cost of borrowing for the issuer.

Straight-Line Amortization

A method of evenly spreading the cost of an intangible asset over its useful life.

Discount at Issuance

The difference between the face value of a bond and its selling price when the bond is sold for less than its face value.

Effective Rate of Interest

The actual cost of borrowing or the actual return on savings, taking into account the effect of compounding interest.