Economic Models Are Only Applicable to Free-Market Countries

question 16

Multiple Choice

Economic models are only applicable to free-market countries.

• A) False. Economic models are applicable wherever there is scarcity.
• B) True. Economic models are applicable only when private citizens are free to make their own decisions.
• C) False. Economic models are applicable in all countries with more than one million people, regardless of political structure.
• D) True. Economic models are only applicable when government is small relative to the rest of the economy.

---

Definitions:

Market Value

The market value denotes the ongoing rate at which an asset or service can be traded in a marketplace.

Market Value

The present rate at which a service or asset is available for purchase or sale on the open market.

Present Value

Present Value is a financial concept that calculates the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Contract Interest Rate

The interest rate specified in a loan or bond agreement, representing the cost of borrowing or the rate of return promised to lenders.