Which of the Following Is a Source of Intellectual Failure

question 10

Multiple Choice

Which of the following is a source of intellectual failure on the part of macroeconomics in predicting the crisis?

• A) Economists did not think financial crises could happen.
• B) Some economists sounded the alarm but were ignored.
• C) Financial intermediation is important to finance not economics.
• D) The financial system is too complex to be included in macroeconomic models.
• E) A lack of focus on the role of financial institutions in the economy.

Discern the roles and activities involved in financing, investing, and operating within a business.

Distinguish between different types of accountants and their specific services.

Comprehend the importance of sharing financial information within an organization.

Understand the impact of currency valuation changes on international business operations.

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Definitions:

Implicit Rate

The implied rate of return that is not explicitly stated, often used in the context of comparing the cost of borrowing to the rate of return on investments.

Equity Capital

The amount of money that is invested in a company by its owners, in exchange for ownership interest or shares.

Economic Profit

The surplus remaining after deducting total costs from total revenues, including both explicit and implicit costs, and representing a measure of economic efficiency.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.