Some Critical Observers of the Stock Market Argue That the Global

question 19

Multiple Choice

Some critical observers of the stock market argue that the global economic crisis of 2007-09 is evidence that:

• A) markets will always have winners and losers.
• B) there is little rational behaviour in financial markets.
• C) people will continue to buy houses.
• D) no one knows when a bubble will next occur.

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Definitions:

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Debts Of Entity

Financial obligations that a company or individual owes to external parties or creditors.

Monetary Unit Assumption

An accounting principle that assumes money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis.

GAAP

Stands for Generally Accepted Accounting Principles; these are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.