Which of the Following Is an Essential Feature of Any

question 78

Multiple Choice

Which of the following is an essential feature of any economic system?

• A) absolute advantage
• B) the profit motive for producers
• C) a voting procedure for choosing leaders
• D) prices determine resource allocation
• E) scarce resources

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Definitions:

Government Budget Deficit

Represents the financial situation in which a government's expenditures exceed its revenues within a specific period, leading to borrowing or debt accumulation.

Trade Balance

The difference in value between a country's imports and exports over a certain period.

Real Interest Rates

The interest rate adjusted for inflation, reflecting the real cost of borrowing and the real yield to lenders or investors.

Crowding Out

The phenomenon where increased government spending leads to a reduction in private sector spending or investment, often due to higher interest rates.