When an Economy Is Operating on Its Production Possibilities Curve,it

question 57

Multiple Choice

When an economy is operating on its production possibilities curve,it is always

• A) both productively efficient and allocatively efficient.
• B) productively efficient but may not be allocatively efficient.
• C) allocatively efficient but may not be productively efficient.
• D) experiencing growth.
• E) increasing its standard of living.

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Definitions:

Recognizes Revenue

The process of recording revenue in the financial statements when it is earned and realizable.

Factoring Arrangement With Recourse

A financial transaction where a business sells its receivables to a third party (factor) but must buy back any uncollected receivables, thus bearing the risk of default.

Holdback

A portion of the purchase price of an asset that is withheld until certain conditions have been met, ensuring fulfilment of contractual terms.

Recourse Obligation

A liability that allows lenders to claim assets of the borrower or guarantor, beyond the collateral securing the loan, in case of default.