"For Whom Is a Given Mix of Goods and Services

question 131

Multiple Choice

"For whom is a given mix of goods and services to be produced? How, in other words, are the society's outputs to be distributed among its members?" In a market economy, this question is resolved primarily in the:

• A) Public sector through the mechanism of central planning
• B) Business sector through the mechanism of advertising
• C) Private sector through the earning and spending of income
• D) Money market through borrowing and saving by households and businesses

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Definitions:

Statement of Cash Flows

An accounting statement detailing collective cash receipts from operational businesses and external investments, plus cash expenses for business and investment activities over a designated period.

Operating Activities

Operating Activities involve the core business processes and transactions related to producing and delivering goods and services, typically reflected in the cash flow statement.

Indirect Method

A method used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to determine the net cash flow from operating activities.

Statement of Cash Flows

A financial statement that provides an aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.