When Goods Are Available in an Economy Free of Charge

question 188

Multiple Choice

When goods are available in an economy free of charge,

• A)market forces cannot be used to allocate resources.
• B)too many of these goods will be produced since there is no cost of production.
• C)the product will have no value for the majority of the population.
• D)the goods can only be luxury goods.

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Definitions:

U.S. Assets

Assets located within the United States that may include real estate, stocks, bonds, and other financial instruments owned by individuals, companies, or the government.

Capital Goods

Long-term assets used in the production of other goods and services, such as machinery, buildings, and equipment, essential for creating consumer goods.

Net Capital Outflow

The net flow of funds invested overseas by a country over a certain period, calculated as the difference between the capital leaving the country and capital entering it.

Foreign Direct Investment

An investment made by a company or individual in one country in business interests in another country, in the form of establishing business operations or acquiring business assets.