A Good Economic Model

question 619

Multiple Choice

A good economic model

• A) should not include more than two variables.
• B) describes every aspect of the economic world, with no exception.
• C) includes all those features of the world that can be described numerically.
• D) includes only those features of the world that are needed for the purpose at hand.

---

Definitions:

Short-Term Portion of Long-Term Debt

The part of a company's long-term debt that is due to be paid within the following twelve months.

5-Year Bank Loan

A financial agreement where a bank lends money to a borrower, to be repaid with interest over a period of five years.

Financial Statements Linkage

The connection and relationship between different financial statements (e.g., balance sheet, income statement, cash flow statement) to assess the financial health of a business.

Retained Earnings

The cumulative amount of profit retained by the company and not paid out in the form of dividends to owners.