Which of the Following Statements About Economic Systems Is NOT

question 378

Multiple Choice

Which of the following statements about economic systems is NOT true?

• A) Government has less of a role in market-directed economies than in command economies.
• B) A market-directed economy self-adjusts through producer and consumer choices.
• C) Producers always make a profit in a market-directed system.
• D) A command economy is more likely to work if the variety of goods and services is small.
• E) Both market-directed and command economies need a macro-marketing system.

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Definitions:

Fiscal Policy

Governmental policies regarding taxation and spending to influence the economy.

Negative Excess Reserves

A situation where a bank has less reserves than the minimum required reserve, indicating a potential liquidity problem.

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by central banking authorities, to ensure bank liquidity.

Actual Reserves

The physical amount of a commodity or cash held as reserves in a financial institution or by an organization.