It Is True That the Distribution Process Carried Out by the Price

question 96

Multiple Choice

It is true that the distribution process carried out by the price system

• A)accomplishes the task more efficiently than central planners would.
• B)favors the rich.
• C)is superior to other rationing mechanisms because it is able to pay attention to individual consumer preferences.
• D)All of the above are true.

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Definitions:

Forward Rate

The agreed-upon exchange rate for a currency, security, or commodity to be delivered and paid for at a future date, used in forward contracts.

Zero-coupon Bonds

Bonds that are issued at a discount to their face value and do not pay interest during their life but are redeemed at full face value at maturity.

Coupon Rate

Yearly rate of interest on a bond, indicated as a percentage of its face value.

Maturity Bond

A fixed-income security that repays the principal along with interest at the end of a specified period.