FIGURE 16- 1

question 68

Multiple Choice

FIGURE 16- 1
-One reason that national defence is a classic example of a public good is that

• A)it would be immoral for private firms to provide this essential commodity.
• B)society deems it to be too important to be provided by the private sector.
• C)military technology is too expensive for private firms to provide.
• D)the benefits of national defence cannot be kept from those who do not pay.
• E)all citizens want national defence.

Explain the relationship between prices and economic activity.

Understand the factors contributing to inflation and its effects on an economy.

Comprehend the concept of productivity and its influence on living standards.

Explain the relationship between inflation and unemployment.

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Definitions:

Identifiable Assets

Identifiable assets are company assets that can be separated from the entity, sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract.

Fair Value

The value likely to be obtained from disposing of an asset or the expense incurred in transferring a liability, within a structured exchange involving market entities at the time of assessment.

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the premium paid over the fair value of the identifiable assets and liabilities.

Liabilities Assumed

Obligations that a company takes on as part of a transaction, such as purchasing another company or assets.