Which of the Following Statements Does Not Apply to a Market

question 388

Multiple Choice

Which of the following statements does not apply to a market economy?

• A) Firms decide whom to hire and what to produce.
• B) The "invisible hand" usually maximizes the well­being of society as a whole.
• C) Households decide which firms to work for and what to buy with their incomes.
• D) Government policies are the primary forces that guide the decisions of firms and households.

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Definitions:

Perpetual Inventory System

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Periodic Inventory System

An inventory accounting system that updates inventory levels and cost of goods sold at the end of an accounting period, rather than after each sale or purchase.

FIFO

"First In, First Out," an inventory valuation method where goods first received are the first to be sold or used, assuming costs rise over time.