How Are the Fundamental Economic Questions Answered in a Market

question 171

Multiple Choice

How are the fundamental economic questions answered in a market economy?

• A)The government alone decides the answers.
• B)Individuals, firms, and the government interact in markets to decide the answers to these questions.
• C)Households and firms interact in markets to decide the answers to these questions.
• D)Large corporations alone decide the answers.

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Definitions:

Intelligence Test

A standard assessment tool designed to measure cognitive abilities, such as reasoning, problem-solving, and understanding complex ideas.

Reasoning

The process of figuring out the implications of particular beliefs.

Abstract Thinking

The ability to think about objects, principles, and ideas that are not physically present, a higher-level cognitive skill enabling conceptual understanding.

Intelligence

The mental capacity to learn from experience, solve problems, and use knowledge to adapt to new situations.