An Economic System Is the Set of Structures and Processes

question 33

Multiple Choice

An economic system is the set of structures and processes that ________ in a country.

• A)guides the allocation of resources and shapes the conduct of business activities
• B)directs the movement of specific products to specific consumers
• C)sets the standards of competitive success for companies in the economy
• D)stipulates the roles and responsibilities of consumers

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Definitions:

Soft Rationing

Refers to the internal limitations set by a company on the funds allocated for capital projects, despite having a strong financial position.

Hard Rationing

A situation in corporate finance where there is a strict limit on the amount of new equity a company can issue.

Operating Cash Flow

Operating cash flow refers to the cash generated by a company's normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Variable Costs

Expenses that change in proportion to the amount of goods produced or the extent of services rendered.