In a Simple Economy of Five Producers and Five Consumers

question 8

Multiple Choice

In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.

• A)ten; twenty-five
• B)thirty; ten
• C)twenty-five; fifteen
• D)sixteen; eight
• E)twenty-five; ten

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Definitions:

Minimum Cash Balance

The least amount of cash a business decides to keep on hand to meet immediate needs, often set as a part of cash management policies.

Cash Excess

Cash excess refers to the situation where a company or individual has more liquid cash available than is necessary for current operations or investments.

Master Budget

A comprehensive financial planning document that includes all of the smaller, individual budgets within an organization, projecting all major financial activities.

Static Budget

A static budget is a fixed budget that does not change or adjust in response to changes in business activity levels, such as sales volume or production capacity, during the budget period.