Identify the Incorrect Statement About Market-Directed Economies

question 320

Multiple Choice

Identify the incorrect statement about market-directed economies.

• A) A market-directed economy adjusts itself.
• B) The American economy is completely market-directed.
• C) Consumers in a market-directed economy decide what is to be produced and by whom-through their dollar "votes."
• D) Consumers in a market-directed economy enjoy great freedom of choice.

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Definitions:

WACC

The weighted average cost of capital, a calculation that reflects the average rate of return a company is expected to pay its security holders to finance its assets.

Riskier

Describing an option or investment with a higher level of uncertainty or potential for loss.

WACC

Stands for Weighted Average Cost of Capital, a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Suitable Projects

Projects that align with a company's strategic goals, resource capabilities, and risk tolerance.