Which of the Following Statements Correctly Characterizes the Problem with Comparing

question 131

Multiple Choice

Which of the following statements correctly characterizes the problem with comparing production outcomes that are stocks and flows?

• A) Labor usage is always a flow, which makes it difficult to compare with stock inputs like capital.
• B) Most capital inputs are stocks, but the returns on these investments (profits) occur as a flow.
• C) Most capital inputs are flows, but economists treat these expenditures as stocks by using the opportunity or economic costs associated with these inputs.
• D) Business returns or profits may be equivalently viewed as stocks or flows, which makes it difficult to compare the returns with the input expenditures.

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