What Is the Basic Task That Economists Expect the Market

question 147

Multiple Choice

What is the basic task that economists expect the market to carry out?

• A)Deal with the fundamental problem of scarcity
• B)Balance the government's budget
• C)Lessen wants to the level of income available
• D)Meet all human wants

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Definitions:

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, indicating the dollar amount investors will pay for $1 of earnings.

Market Price

The existing cost for buying or selling an asset or service.

Common Stock

Common stock represents shares of ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Acid-Test Ratio

A financial metric used to evaluate a company's short-term liquidity position by comparing its most liquid assets (excluding inventory) to its current liabilities.