"Mediocre Economists Often Consider Only the Immediate Apparent Effects of a Change

question 83

Multiple Choice

"Mediocre economists often consider only the immediate apparent effects of a change, whereas a good economist will also consider effects that may only become observable over time." This statement most clearly emphasizes

• A) the fallacy of composition.
• B) economizing behavior.
• C) the importance of secondary effects.
• D) the fact that association is not causation.

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Definitions:

Permanent Accounts

Permanent accounts are those ledger accounts whose balances are carried over from one accounting period to the next, including assets, liabilities, and equity accounts.

Current Liabilities

Obligations or debts that a company is expected to pay within a year, such as accounts payable, short-term loans, and accrued expenses.

Accounts Receivable

The sum customers owe a business for the supply of goods and services that payment has not yet been made for.

Unearned Revenues

Revenue a company earns for products or services that have not yet been provided or completed.