When the Market Does NOT Result in an Efficient Allocation

question 185

Multiple Choice

When the market does NOT result in an efficient allocation of scarce resources,economists say that there has been:

• A)market dropout.
• B)normative economics.
• C)market disincentives.
• D)market failure.

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Definitions:

RRSP

In Canada, the Registered Retirement Savings Plan serves as an investment and savings scheme aimed at providing for the retirement needs of employees and self-employed people.

Interest Earned

The amount of money generated as income on an investment, savings, or lending over a specified period.

Compounded Annually

Interest calculated on the initial principal and also on the accumulated interest from previous periods within a year.

Home Ownership Savings Plan (HOSP)

A savings plan designed to help individuals accumulate funds towards the purchase of a home.