To Determine the Financial Condition of an Existing Business, It

question 18

Multiple Choice

To determine the financial condition of an existing business, it is necessary to compare ______ with ______ to identify where costs can be reduced or more money is needed.

• A) operating ratios; fiscal averages
• B) operating ratios; industry averages
• C) expense ratios; fiscal averages
• D) expense ratios; industry averages

---

Definitions:

Classical Economists

Economists of the 18th and 19th centuries who believed in free markets, minimal government intervention, and the self-regulating nature of economies.

Stable Economy

An economic condition characterized by predictability, low inflation, and minimal unemployment, indicating a healthy economic environment.

Say's Law

An economic theory proposing that supply creates its own demand, meaning production inherently creates the means to purchase other goods.

Keynesian Theory

Keynesian Theory is an economic theory stating that government intervention through fiscal and monetary policy is necessary to manage aggregate demand and address economic cycles.