Economic Models

question 138

Multiple Choice

Economic models

• A)cannot be useful if they are based on false assumptions.
• B)were once thought to be useful, but that is no longer true.
• C)must incorporate all aspects of the economy if those models are to be useful.
• D)can be useful, even if they are not particularly realistic.

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Definitions:

Limited Liability Company

A flexible form of enterprise that blends elements of partnership and corporate structures, protecting members against personal liability beyond their investment.

General Partnership

A form of business partnership where all partners share both the management and the liability for the company's debts.

Capital Balance

The amount of money that an entity has in its capital account, reflecting the net worth contributed by the owners/shareholders plus retained earnings.

Bonus Method

An accounting method for recording partnership transactions where a new partner's investment is more than or less than the book value of the capital they are entitled to.