What Is the Principal Reason That Economists Give for the Existence

question 202

Multiple Choice

What is the principal reason that economists give for the existence of deflationary and inflationary gaps?

• A)Wages are flexible in the short run.
• B)Wages are flexible in the long run.
• C)Wages are fixed in the long run.
• D)Wages are fixed in the short run.

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Definitions:

Adjusting Entry

An accounting record made to adjust income or expenditure in accounts to reflect the accrual basis of accounting properly.

Stockholders' Equity

The ownership claim on a corporation's assets that remains after all liabilities are accounted for, denoting shareholder interest.

Current Assets

Short-term assets that are expected to be converted into cash within one year or within the operating cycle of a business.