-After Examining Figure 8-3,it Is Possible to Conclude That

question 22

Multiple Choice

-After examining Figure 8-3,it is possible to conclude that

• A) people do not save money nor pay taxes in this model
• B) firms purchase resources from households and other firms in this model
• C) households are the only ones who purchase and firms the only ones who sell in this model
• D) completion of a sale represents a break in the flow of goods and services,and inputs in this model
• E) all households and firms individually receive the same amount of money in this model

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Definitions:

Contingent Liability

A potential obligation that may arise depending on the outcome of an uncertain future event, which is not confirmed at the date of the financial statements.

Fair Value

What would be pocketed from an asset sale or the price to offload a liability during a methodical engagement with market individuals on the day of measurement.

Present Obligation

A duty or responsibility to act or perform in a certain way.

Goodwill

The intangible asset that arises when a buyer acquires an existing business but pays more than the fair market value of the net assets.