The "Invisible Hand" Refers to the Notion That

question 27

Multiple Choice

The "invisible hand" refers to the notion that

• A) competitive markets send resources to their highest valued uses.
• B) government intervention is necessary to ensure efficiency.
• C) marginal benefit decreases as more is consumed.
• D) marginal cost increases as more is produced.
• E) no matter what allocation method is used, the resulting production is efficient.

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Definitions:

Interest

The cost of borrowing money, usually expressed as a percentage of the amount borrowed, paid by the borrower to the lender.

Market Rate

The current price or interest rate at which a good, service, or security can be bought or sold in a competitive marketplace.

Long-Term Investment

Investments in bonds, stocks, or real estate held for an extended period to generate revenue or appreciate in value, not intended for immediate sale.

Interest Receipt

A document acknowledging receipt of interest income on investments or savings.