An Economic System Is

question 161

Multiple Choice

An economic system is

• A) the universe of all resources.
• B) a way to create new resources.
• C) a mechanism to allocate scarce resources.
• D) an organization that generates profits.

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Definitions:

Inflation Rate

The speed at which the average price of goods and services increases, leading to a decrease in buying power.

Pure Rate

Pure rate, in finance, could refer to the actual interest rate without the influence of inflation or to the risk-free rate of return, which is the theoretical return of an investment with zero risk.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or additional shares.

PE Ratio

Price-to-Earnings Ratio; a valuation measure for a company comparing its current share price to its per-share earnings.