Which of the Following Relationships Is Correct

question 64

Multiple Choice

Which of the following relationships is correct?

• A)Liabilities = Net worth - Assets
• B)Liabilities = Assets
• C)Liabilities = Net worth + Assets
• D)Net worth = Assets - Liabilities

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Diet Soda

is a low-calorie or zero-calorie carbonated beverage made with artificial sweeteners instead of sugar.

Substitution Effect

The change in consumption patterns due to a change in price, leading consumers to substitute one product for another.

Real Balance Effect

An economic theory suggesting that inflation or deflation changes individuals' purchasing power, affecting their real income and consumption patterns.