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Doing business in the financial markets most fundamentally presupposes that:

A) Power will be respected.
B) Fairness will be upheld.
C) Freedom is unrestricted.
D) Ideas will be prioritized.
Please select the correct option.

1 Answer

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Final answer:

In the context of financial markets, the most fundamental assumption is that fairness will be upheld. Markets need to balance freedom with rules to ensure equity and efficiency, while government oversight is important to achieve long-term sustainable growth and equitable economic outcomes.

Step-by-step explanation:

Doing business in the financial markets most fundamentally presupposes that fairness will be upheld (Option B). This is key because markets operate effectively when there is a level playing field, where rules regarding economic transactions are transparent and enforced to ensure that no parties are unfairly disadvantaged or advantaged. Equity in economics involves the promotion of fairness, such as equal pay for equal work and prevention of discrimination in the workplace. Furthermore, the organization of economic institutions is not an absolute choice between market forces and governmental intervention; rather, it is about finding the correct balance to allow market freedom while maintaining rules that enhance fairness and efficiency.

Markets strive for economic efficiency by making the best use of resources without waste, while also aiming for economic security by providing safety nets for the unemployed or those unable to work. Full employment is also a key objective to ensure participation in economic activity and growth. The balance between market and government reflects the complexity of achieving price stability and economic growth. The effectiveness of markets in reaching equilibrium depends on how well these principles are observed and implemented within the market system. The notion that sheer economic freedom leads to optimal outcomes is often challenged by the need for governmental oversight to ensure these objectives are met, especially in the context of long-term sustainability and the health of ecosystems.

User Joseph Williamson
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