If an Economic Action Generates More Costs Than Benefits, the Action

question 524

Multiple Choice

If an economic action generates more costs than benefits, the action

• A) by definition increases the nation's economic welfare.
• B) should not be undertaken from an efficiency standpoint.
• C) should be undertaken from an efficiency standpoint.
• D) is desirable from a public welfare standpoint, even though many individuals will be harmed.

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Definitions:

Preparing Closing Entries

The procedure of transferring all income statement balances to permanent accounts at the end of an accounting period to prepare for the next period.

Fiscal Year

A one-year period that companies use for financial reporting and budgeting, which does not necessarily align with the calendar year.

Accounting Period

A specific period of time used by businesses to calculate their financial results and prepare financial statements, such as a month, quarter, or year.

Calendar Year

A period of one year that begins on January 1 and ends on December 31, used as an accounting period by many businesses.