In a Command Economy, ________

question 81

Multiple Choice

In a command economy, ________.

• A)businesses and consumers are assumed to be the best judges of how resources should be allocated
• B)the government sets goals and determines the price and quantity of what is produced
• C)different economic sectors coordinate the activities of the federal government
• D)each enterprise sets its goals before making reports to the central government

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Definitions:

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Net Present Value

The calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account, often used to assess the profitability of an investment.

Tax Rate

The percentage at which an individual or corporation is taxed.

Payback Period

The duration of time it takes to recoup the cost of an investment.