Which of the Following Is Correct

question 24

Multiple Choice

Which of the following is correct?

• A) Reported accounting numbers do not affect the transfer of resources.
• B) Credit rating agencies use accounting information to assess only assets.
• C) Efficient capital markets promote productivity and encourage innovation.
• D) Efficient capital markets promote productivity but do not encourage innovation.

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Definitions:

Current Account

Part of a nation's balance of payments encompassing the trade balance, net primary income, and net secondary income components.

Balance of Payments

A comprehensive summary of a country's economic transactions with the rest of the world over a specific time period, including trade, services, and financial transfers.

Capital Account

A component of a nation’s balance of payments that records all transactions of purchase and sale of assets, like real estate and stocks with other countries.

Financial Account

A component of a country's balance of payments that records transactions of foreign investment and domestic investments abroad.