When One Basketball Team Spends a Large Sum of Money

question 3

Multiple Choice

When one basketball team spends a large sum of money acquiring better players, it is better off. If all teams do the same thing, all of them will be better off." These statements demonstrate:

• A)the fallacy of composition
• B)the fallacy that association is causation.
• C)a misunderstanding of the direction of causality.
• D)the ceteris paribus condition
• E)the rational expectations theory.

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Definitions:

Adjusting Journal Entry

a bookkeeping entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Net Income

The remaining income of a company once all taxes and costs are deducted from its total revenue.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, representing the wear and tear, or obsolescence of the asset.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for expenses and revenues at the end of an accounting period.