In a Market Economy

question 18

Multiple Choice

In a market economy,

• A) there is a fixed economic pie to be divided among individuals.
• B) differences in incomes provide individuals with an incentive to supply resources that are highly valued by others.
• C) a central distributing agency carves up the economic pie and allocates slices to individuals.
• D) both a and b above are true.

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Definitions:

Note

A promise by the maker of the note to pay the payee of the note.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Negotiable Instruments

Financial documents that guarantee the payment of a specified sum of money, either on-demand or at a set time.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize statutes across the states to facilitate easier interstate commerce.