A Current Ratio of 2 Means

question 59

Multiple Choice

A current ratio of 2 means

• A) 2% from each paycheck is available for savings.
• B) The minimum payment for a credit card is 2% of the balance.
• C) 2 months of living expenses are available in case of emergency.
• D) Net worth equals 2 times the amount of debt.
• E) $2 of liquid assets are available for every $1 in current liabilities.

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Definitions:

Inefficiency

Refers to a lack of efficiency, where resources are not used in the most productive way, often resulting in wasted time or energy.

Monopolies

Market structures where a single producer or seller controls the entire supply of a product or service, often leading to reduced competition.

Efficient Level Output

The Efficient Level Output refers to the quantity of production that achieves the highest possible efficiency in terms of cost and resource usage, often where marginal costs equal marginal revenue.

Profit-maximizing Price

The price level at which a business can achieve the highest possible profit, given its production costs and demand for its products.