One Advantage of Using Checks to Settle Transactions Is

question 2

Multiple Choice

One advantage of using checks to settle transactions is

• A)they are more difficult to use fraudulently than currency or precious metals are.
• B)there is effectively no cost to using them.
• C)they are as liquid as cash.
• D)there is no information cost involved in accepting them.

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Definitions:

Sunk Costs

Expenses that have been incurred and cannot be recovered, regardless of future actions.

Competitive Market

A market structure where many buyers and sellers exchange homogeneous products and no single participant has the power to significantly influence the price of the product.

Economic Profits

The difference between the total revenue earned by a business and the total costs (both explicit and implicit) of all inputs used, representing the additional gain over and above the opportunity costs.

Accounting Profits

The difference between total revenue and explicit costs; essentially the bottom line of a company's income statement.