Which of the Following Statements Most Accurately Describes the Concept

question 169

Multiple Choice

Which of the following statements most accurately describes the concept of economic theory?

• A) It should be as detailed as possible in order to model the complexity of an economy.
• B) It is an abstraction from reality.
• C) It is only useful if it rests on realistic assumptions.
• D) It is unrealistic and therefore of questionable usefulness in explaining what occurs in a complex economy.

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Definitions:

Intangible Assets

Non-physical assets of value to a company, such as patents, trademarks, goodwill, and copyrights.

Normal Account Balance

The typical or expected balance of an account, where asset and expense accounts are usually debit balances and liability, equity, and revenue accounts are credit balances.

Revenue Account

An account that tracks the income a company generates from its business activities.

Compound Entry

An accounting entry that involves more than two accounts, recording multiple debits and/or credits in a single transaction.