Economic Theory

question 15

Multiple Choice

Economic theory

• A) is a set of definitions, postulates, and principles assembled in a manner that helps make cause-and-effect relationships clear in economics.
• B) is like a guidebook in that it points out what to look for.
• C) provides economists with a common language and way of thinking about how the world works.
• D) is all of the above.

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Definitions:

Liabilities

Financial obligations or debts that a company or individual owes to others, which need to be settled over time by transferring economic benefits.

Closed-End Funds

A type of investment fund with a fixed number of shares, traded on the stock exchange, unlike open-end funds which continuously issue new shares.

Premium

The amount by which the price of a financial instrument, such as an insurance policy or bond, exceeds its face value or nominal cost.

NAV

Net Asset Value; the total value of a fund's assets minus its liabilities, often used in the context of mutual funds.