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.

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Definitions:

Minimum Lease Payments

The lowest amount that a lessee is expected to pay over the lease term, including both principal and interest components.

Direct Financing Lease

A type of lease arrangement where the lessor purchases an asset for the lessee and rents it out, effectively acting as a financing tool.

Operating Lease

A lease agreement that allows for the use of an asset but does not convey rights of ownership of the asset.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its expected useful life in equal annual amounts.