If Asked About the Basic Functioning of the Economy,a Classical

question 6

Multiple Choice

If asked about the basic functioning of the economy,a classical economist would claim that:

• A) the market tends toward stability and full employment.
• B) the market tends toward instability and cyclical unemployment.
• C) prices are slow to adjust.
• D) the economy needs help in moving back to full employment.
• E) the short run is more significant than the long run.

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Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company’s operations is directly reported.

Accounts Receivable

The amount of money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Cash Sales

Transactions where payment is made in cash at the time of the sale, without any credit extended.

Credit Sales

Sales transactions where the buyer is allowed to pay the seller at a later date, typically extending credit to the customer.