Do Markets Solve All of Society's Problems

question 28

Multiple Choice

Do markets solve all of society's problems?

• A)Yes, markets are efficient and work well under nearly all circumstances.
• B)Yes, markets solve the problems of production and distribution.
• C)No, they do not solve problems such as unemployment and inflation.
• D)No, they hardly solve any problems at all.
• E)Uncertain, economic theory has no answer to this question.

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Definitions:

Dilutive Securities

Financial instruments that could reduce earnings per share if converted to common stock, such as warrants and convertible bonds.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to some of the numbers more than others.

Ordinary Shares

Shares of a company providing ownership rights and potential dividends to holders but usually with voting rights.

Tax Expense

The sum of the current tax and deferred tax charged to an entity's profit or loss for the period.