In a Country That Depends on the Government to Decide

question 85

Multiple Choice

In a country that depends on the government to decide the allocation of resources,

• A)social efficiency is maximized and resources are allocated to where they are most highly-valued.
• B)individuals are incentivized to acquire higher skills and education.
• C)the allocation system is fair in the sense that everyone gets an equal opportunity.
• D)individuals aspire to join the ranks of the government.
• E)there is hardly any shortage or scarcity of goods.

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Definitions:

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified price on a future date.

Exchange Gain

The profit resulting from foreign exchange transactions and the fluctuation in exchange rates, realizing a higher value in the home currency.

Net Loss

The amount by which total expenses exceed total revenues for a business during a specific period, indicating a financial loss.

Spot Rate

The current exchange rate at which a currency can be bought or sold for immediate delivery.