According to the Invisible Hand Principle, Competitive Markets Generally

question 161

Multiple Choice

According to the invisible hand principle, competitive markets generally

• A) bring the self-interest of individuals into harmony with the efficient allocation of resources, even though centralized planning of economic activities is absent.
• B) bring the self-interest of individuals into harmony with the efficient allocation of resources when the behavior of individuals is directed by democratic centralized planning.
• C) require central direction; otherwise, the actions of self-interested individuals will conflict with the general interests of society.
• D) promote the economic welfare of self-interested producers at the expense of unorganized groups such as consumers and taxpayers.

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Definitions:

Excess Cash

The amount of cash holdings that exceeds what a business requires for its immediate operational needs.

Share Repurchase

A corporate action in which a company buys back its own shares from the marketplace, which can reduce the number of outstanding shares and often increase the value of remaining shares.

Equity Worth

The value of a shareholder's ownership interest in a company, often reflected in the price of the company's stock.

Market Value

The current market rate at which an asset or service can be traded.