Economic Theories

question 21

Multiple Choice

Economic theories

• A)can be used to help explain and predict economic behaviour.
• B)cannot be tested because we cannot do economic "experiments".
• C)must apply to all economies to be true.
• D)are not useful because of the unrealistic assumptions they contain.
• E)cannot help to predict future behaviour.

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Definitions:

Declared

Refers to a dividend or other corporate action that has been formally announced by a company's board of directors.

Payment of Dividends

This refers to the distribution of a portion of a company's earnings to its shareholders.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, recognizing the asset's wear and tear, deterioration, or obsolescence.

Indirect Method

A way of calculating cash flows in the statement of cash flows where net income is adjusted for non-cash transactions and changes in working capital.