When a Firm Has Earnings It Has Not Yet Paid

question 7

Multiple Choice

When a firm has earnings it has not yet paid out to the owners, those earnings are called

• A) surplus capital.
• B) cash reserves.
• C) retained earnings.
• D) unearned income.

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Definitions:

Economic Resources

The land, labor, capital, and entrepreneurial ability that are used to produce goods and services. Also known as the factors of production.

Central Planning

An economic system where major decisions about the production, allocation, and distribution of goods and services are made by the government.

Economy Expands

A phase of the economic cycle where there is an increase in industrial production, employment, income, and sales, indicating overall growth in the economy.

Economic Efficiency

A state in which resources are allocated in a way that maximizes the total utility to society, minimizing waste and inefficiency.