The Text Asserts That the Allocation of Resources Among Firms

question 27

Essay

The text asserts that the allocation of resources among firms is efficient. What assumptions must hold for this to be true?

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Definitions:

Cash Account

An account that records all transactions involving cash inflows and outflows, including receipts, disbursements, and balances.

Debited

An accounting entry that increases an asset or expense account, or decreases a liability or equity account.

Cash Receipts

The collection of money, including coins, notes, cheques, and electronic transfers, by a business from transactions involving goods or services.

Cash Account

A financial account that records cash transactions, including receipts and payments of cash.