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.

---

Definitions:

Dividend Income

Income received from owning shares in a company, typically distributed from the company's profits.

Common Stock

Shares representing ownership in a company, providing voting rights and potential dividends, but with a lower claim on assets than preferred shares.

Short-term Speculation

Engaging in financial transactions with the expectation of achieving significant gains within a short time frame, often involving high risk.

Market Value

The price at which an asset would trade in a competitive auction setting.