Which of the Following Statements About Exchange Is False

question 218

Multiple Choice

Which of the following statements about exchange is false?

• A) The expectation of gain motivates people to engage in trade.
• B) If a party to a potential exchange does not believe that it will lead to personal gain, he or she can chose not to engage in the trade.
• C) Voluntary exchange is generally mutually beneficial to the trading partners.
• D) If one trading partner gains, the other must lose.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, indicating profit or loss.

Partners' Capital Statement

A financial statement that shows the changes in each partner’s equity in the business over a specific period of time.

Drawings

Withdrawals of cash or other assets from a business by the owner for personal use.

Capital Statement

A financial statement that outlines the changes in owners' equity over a specific period.