Because Every Transaction Has a Buyer and a Seller

question 226

Multiple Choice

Because every transaction has a buyer and a seller,

• A)GDP is more closely associated with an economy's income than it is with an economy's expenditure.
• B)every transaction contributes equally to an economy's income and to its expenditure.
• C)the number of firms must be equal to the number of households in a simple circular-flow diagram.
• D)firms' profits are necessarily zero in a simple circular-flow diagram.

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Definitions:

Standard Deviation

A statistical measure representing the dispersion or variability of a set of data points from their mean, often used in finance to gauge the volatility of an investment.

Effective Annual Rate

The interest rate on an investment or loan, annualized and taking into account the effects of compounding within the year.

Quarterly Return

The financial performance of an investment or asset over a three-month period, typically expressed as a percentage.

Investment

This refers to the allocation of resources, often financial, in assets or projects with an expectation of generating future returns.