Which of the Following Is True Regarding Value, Transaction Costs

question 219

Multiple Choice

Which of the following is true regarding value, transaction costs, and exchange?

• A) Middlemen can be viewed as agents who create value by reducing transaction costs and, thereby, facilitating gains from exchange.
• B) Middlemen fail to create value since they do not expand the supply of physical goods.
• C) A good or service has a given value regardless of who uses it or how it is used.
• D) Voluntary exchange reduces value by channeling goods into the hands of people who value them least.

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Definitions:

Forthcoming Year

The approaching or upcoming calendar year.

Long-term Debt

Debt obligations of a business that are due more than one year in the future, often used for large purchases or investments.

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.

Financial Statements

Reports that summarize a company's financial performance and position, including balance sheets, income statements, and cash flow statements.