Why Government Is a Participant in a Market-Oriented Economy

question 97

Multiple Choice

Why government is a participant in a market-oriented economy?  

• A) to enforce contracts and protect private property 
• B) to promote collusion 
• C) to promote the growth of natural monopolies 
• D) to provide more inequality in the distribution of income

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Definitions:

Fixed Selling Expenses

Fixed selling expenses are those costs associated with selling a product that do not change with the level of production or sales, such as salary of sales staff and rent for office space.

Administrative Expenses

Administrative expenses are the costs associated with the general administration of a business, such as salaries of office staff, utilities, and rent.

Schedule of Expected Cash Collections

A detailed projection of the amounts and timing of cash inflows from receivables anticipated to be collected.

Merchandise Purchases Budget

A financial plan that outlines the expected purchases of merchandise inventory over a certain period, considering anticipated sales and desired inventory levels.