Suppose There Is a Theory That Several Things Influence the Price

question 14

Multiple Choice

Suppose there is a theory that several things influence the price of fish in Halifax, one of which is the weather during the fishing season. When examining the determinants of the price of fish, the weather is

• A)a stock, as it influences the quantity of fish caught.
• B)an endogenous variable, as it influences the price of fish.
• C)an endogenous variable, as it is determined within the theory.
• D)an exogenous variable, as it is determined outside the theory.
• E)an act of God and, therefore, has no legitimate connection with the theory.

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Definitions:

IRS

The Internal Revenue Service, a U.S. government agency responsible for the collection of taxes and enforcement of tax laws.

Reversing Temporary Difference

An accounting adjustment that reverses differences between tax and financial reporting over time.

Originating Temporary Difference

A difference that arises in a particular period between the book income and taxable income, which is expected to reverse in the future.

Municipal Bonds

Debt securities issued by municipalities or local governments to finance public projects, typically offering tax-exempt interest payments to investors.