Choose the Statement That Best Characterizes an Economic Theory

question 107

Multiple Choice

Choose the statement that best characterizes an economic theory.An economic theory

• A)is only useful if its underlying assumptions are realistic.
• B)will be useful as long as it is logically consistent.
• C)must be judged on its ability to explain and predict real-world phenomena.
• D)will predict more accurately if it contains a greater number of mathematical equations.
• E)will be useful only if all human behaviour is rational.

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Definitions:

Perpetual Inventory System

A financial recording method where sales or purchases of inventory are immediately captured through the use of computerized point-of-sale systems and software for managing enterprise assets.

Gross Method

An accounting practice where purchase discounts are ignored unless taken, with full invoice amounts recorded in the accounts payable.

Invoice Price

The price of goods as listed on the invoice, typically before any discounts, taxes, or additional charges.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.