Which of the Following Statements Most Accurately Identifies a Limitation

question 266

Multiple Choice

Which of the following statements most accurately identifies a limitation of the free-market economic system?

• A) Free-market economies offer little opportunity for the poor to work their way out of poverty.
• B) Free-market economies have been unable to create wealth as rapidly as other types of economic systems.
• C) Free-market economies are generally plagued by shortages of needed consumer goods.
• D) Free-market economies tend to result in unequal distribution of wealth.

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Definitions:

Allowance or Exemption

A reduction in the amount of income that is subject to tax, or a legal deduction from reported income to reduce taxable income.

Nontaxable

Income or transactions that are not subject to taxation by government authorities.

FICA-OASDI

The part of the U.S. payroll tax that funds the Social Security program, officially called Old Age, Survivors, and Disability Insurance.

FICA-Medicare

Part of the U.S. payroll tax that funds Medicare, providing health insurance to individuals aged 65 and over, and to certain younger people with disabilities.