Economic Costs Are Synonymous with

question 59

Multiple Choice

Economic costs are synonymous with

• A) Accounting costs
• B) Sunk costs
• C) Opportunity costs
• D) Implicit costs

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Definitions:

Daily Operations

The day-to-day activities necessary for a business to function smoothly, including production, sales, and administrative tasks.

Compensating Balance

A minimum account balance that a borrower is required to maintain with a lender as a condition for a loan, intended to compensate the bank for providing the loan or credit line.

Effective Interest Rate

The actual return on an investment or the actual cost of a loan, taking into account the compounding of interest over time, as opposed to the nominal interest rate.

Short-Term Bank Loan

A loan obtained from a bank that has a short repayment period, typically less than one year.