Which of the Following Is Correct

question 38

Multiple Choice

Which of the following is correct?

• A)Reported accounting numbers do not affect the transfer of resources.
• B)Credit rating agencies use accounting information to assess their assets.
• C)Efficient capital markets promote productivity and encourage innovation.
• D)Efficient capital markets promote productivity but do not encourage innovation.

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Definitions:

Income Effect

How an individual's or economic income shift influences the demand for goods or services.

Substitution Effect

The substitution effect describes the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Higher Wage

The increased remuneration or salary received by an employee, often as a result of promotions, market adjustments, or successful salary negotiations.

Labor for Leisure

The trade-off between working hours for income and spending time on relaxation or enjoyment activities.