Which of the Following Is True with Regard to Value

question 115

Multiple Choice

Which of the following is true with regard to value and exchange?

• A) Exchange generally moves a good from a person who values it more to a person who values it less.
• B) Transaction costs reduce our ability to gain from potentially advantageous trades.
• C) Middlemen increase transaction costs and, thereby, reduce the potential gains derived from trade.
• D) Physical goods have an objective value that is unrelated to time and the person of ownership.

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Definitions:

Inflow Of Cash

Money or cash equivalents coming into a business, typically from operations, investments, or financing activities.

Bond Payable

A financial instrument representing a loan made by an investor to a borrower, typically corporate or governmental, with a promise to pay back the principal along with interest on specified dates.

Operating Activities

Activities that constitute the primary or main activities of a company, such as selling goods and services, which are reflected in the income statement.

Statement Of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives.