The free market economy is the one where the buyers & sellers should freely select to buy or make.
The following information related to the free market economy is:
- It should depend upon the supply & demand having no government interference.
- In this, the buyers & sellers have the right to select for making or buying whatever they want.
Therefore we can conclude that the free market economy is the one where the buyers & sellers should freely select to buy or make.
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Answer: $32000
Explanation:
The required reserves will be calculated as:
= Checkable deposit × Legal reserve ratio
= $80000 × 20%
= $16000
Excess reserves = $16000
Actual reserves will now be:
= Required reserves + Excess reserves
= $16,000 + $16,000
= $32,000
Answer:
rate of return: 16.67%
Explanation:
unadjusted rate of return
Average investment
Assuming no salvage value:
(beginning investment + ending investing)/2
(4,800 + 0 )/ 2 = 2,400
<u>cost savings:</u> 720
<u>depreciation:</u> 4,800 / 15 = 320
average return 400
400/2400 = 16.67%
<span>In the long run, profits will equal zero in a competitive market because of free entry and exit.
Because there is free entry in a market, the competition can come and go as they please. This stops the ability for a company to have a monopoly because any company can come and sell the product. Companies are also able to leave a market but they may leave behind their goods without profit.
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