One Example Where a Rules Based Approach Would Have Improved

question 85

Multiple Choice

One example where a rules based approach would have improved the economy is ________.

• A) the Great Depression
• B) the financial crisis in 2007
• C) the subprime mortgage markets
• D) derivatives trading

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Definitions:

Fixed Cost

Costs that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.

Depreciation Expense

The portion of the total cost of a tangible asset that is charged as an expense in a reporting period, due to its reduction in useful life.

Sensitivity Analysis

A technique used to determine how different values of an independent variable impact a particular dependent variable under a given set of assumptions.

Variable Costs

Expenditures that increase or decrease in tandem with production volume.