The Role of Price in a Market-Directed Economy Is To

question 321

Multiple Choice

The role of price in a market-directed economy is to:

• A) allocate resources and distribute income according to consumer preferences.
• B) serve as a rough measure of the social importance of consumer goods and services.
• C) coordinate the economic activity of many people and institutions.
• D) serve as a rough measure of the value of resources used to produce goods and services.
• E) All of these are true.

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Definitions:

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements, which may not necessarily align with the calendar year.

Stockholder's Equity

The ownership interest of shareholders in the assets of a corporation, represented by their shares of the company's stock.

Owners

Individuals or entities that hold legal possession and control over a business or asset, having a claim on the business's profits and an obligation for its debts.

Corporation

A legal entity that is separate and distinct from its owners, who are known as shareholders, and has its own rights and obligations.