Which of the Following Statements Does NOT Describe a Command

question 202

Multiple Choice

Which of the following statements does NOT describe a command economy?

• A)Government bureaucrats decide what and how much is to be produced.
• B)A command economy is sometimes called a "planned economy."
• C)Prices are set by the law of supply and demand.
• D)Producers offer a highly limited assortment of goods and services.
• E)This type of economy is found in countries like Iran and North Korea.

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Definitions:

PVGO

Present Value of Growth Opportunities; the portion of a company's stock price that is attributed to its expected earnings growth.

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, necessary to maintain or expand the asset base.

WACC

The weighted average cost of capital, a measure of a firm's cost of capital in which each category of capital is proportionately weighted.

Firm Value

The total value of a company, measured by its market capitalization plus debts, minority interest, and preferred shares, minus total cash and cash equivalents.