Every Dollar Borrowed

question 36

Multiple Choice

Every dollar borrowed

• A) represents a dollar leaving the circular flow.
• B) requires a dollar to be saved.
• C) represents a piece of capital.
• D) requires the supply of loanable funds to increase.
• E) causes inflation.

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Definitions:

Payback Period

The length of time required for an investment to recover its initial outlay in terms of profits or savings.

Useful Life

The estimated duration for which an asset is expected to be functional and useful before it needs to be replaced or repaired.

Initial Cost

The initial amount of money invested or spent to purchase or start a new project, asset, or business, excluding ongoing or future costs.

Mutually Exclusive

Mutually exclusive describes a scenario where the occurrence of one event makes the occurrence of another impossible.