In the Context of Economics, Assumptions

question 8

Multiple Choice

In the context of economics, assumptions

• A)are stated or unstated value judgments, definitions and interpretations made without supporting evidence.
• B)are logical conclusions reached in the first step of economic analysis and used consistently from thereon.
• C)must be based on the evidence at hand but do not need to be explicitly stated
• D)are different for every person and thus have no role in unbiased policy analysis

---

Definitions:

Limousine

A luxury vehicle driven by a chauffeur, often elongated in form, used for special occasions or services.

Discount Rate

The rate of interest applied to discount future cash flows back to their current value, commonly employed in evaluating investments and planning for capital expenditures.

Salvage Value

The approximated financial return of an asset at the termination of its usefulness.

Operating Costs

Expenses associated with the day-to-day functioning of a business, excluding the cost of goods sold.